Papua New Guinea LNG project, in which IPIC indirectly holds a stake, is to start early and reduce energy footprint.
Oil Search and partners plan bigger output of PNG LNG
The partners in a US$15 billion (Dh55.09bn) Papua New Guinea gas export development in which Abu Dhabi is an indirect investor are scrambling to deliver a bigger project sooner in the face of stiff competition from Australia and Qatar.
The first phase of the PNG LNG development, which would produce up to 6.6 million tonnes per year of liquefied natural gas (LNG), was on track for completion in early 2014, about a year earlier than originally scheduled, Peter O'Neill, the Papua New Guinea treasury and finance minister, told an energy conference this week in Sydney, Australia.
The development consortium, led by ExxonMobil, is also expected to fast-track an expansion that could as much as double the project's size by adding one or two gas liquefaction plants.
"There's a window of opportunity in the market and strong competition, and if you miss that window you might be sitting in a queue for a while," said Peter Botten, the chief executive of the locally based project partner Oil Search.
The Abu Dhabi Government's International Petroleum Investment Company (IPIC) owns 17.6 per cent of Oil Search, which in turn holds a 34 per cent stake in PNG LNG.
The project faces competition for a slice of the expanding Asian gas market from several rival Australian LNG developments that are expected to come on stream in the next five years.
At the same time, Qatar, the world's biggest LNG exporter, may continue to divert cargoes to Asia from Europe and the US in coming years because of an Atlantic basin gas glut.
Decie Autin, ExxonMobil's upstream project manager for PNG LNG, said contractors had initiated earthworks at the site for PNG LNG's first phase. She expected the first PNG LNG cargo to be loaded in 2014.
Although a final investment decision on the proposed project expansion is pending, the consortium plans further exploration drilling next year at its Hides and P'nyang gas prospects to feed a bigger terminal.
In addition, Talisman Energy, a Canadian oil and gas producer with assets in Papua New Guinea, has expressed interest in supplying gas to the project.
"Our whole exploration and development programme is subject to review, and we've made it clear publicly that we're keen to understand our resource base in all our licences as quickly as possible," Mr Botten said.
In a related development, the trading arm of the Russian gas giant Gazprom and Trans Wonderland, a Papua New Guinea transport and logistics services company, this week signed a framework agreement to collaborate on clean-energy projects, especially a plan to use LNG instead of diesel in most of Trans Wonderland's operations. Gazprom would act as the buyer of carbon credits for the fuel-switch project under the UN Clean Development Mechanism, a programme providing financial incentives for rich countries to invest in clean-energy projects in developing economies.
In October, a joint venture between Trans Wonderland and the Kuwaiti logistics company Agility won an exclusive $192 million contract to provide transportation services to PNG LNG.