InterOil and Pacific LNG Operations have signed agreements with Samsung Heavy Industries and FLEX LNG (FLNG) for the construction and operation of a 2 million tonne per annum (mtpa) floating liquefied natural gas (LNG) project offshore Papua New Guinea.

The FLNG project is intended to integrate with and augment proposed infrastructure to liquefy natural gas from the onshore Elk and Antelope gas fields in the Gulf Province of Papua New Guinea.

This is pursuant to preliminary arrangements with Energy World Corporation and to link with InterOil’s proposed condensate stripping plant (CSP) being pursued in joint venture with the Mitsui Group and to accelerate the intended monetization of the Elk and Antelope fields.

Commencement of the FLNG vessel’s operations is targeted for mid 2014.

The project-specific FEED should get under way in May 2011, with the firms expecting to reach a final investment decision (FID) before the end of this year.

FLEX LNG, to joint operator of the FLNG vessel together with LNGL, and Samsung Heavy Industries will be responsible for the design, engineering, construction and commissioning of the FLNG vessel.

The construction of the FLNG unit will be fully financed by FLEX LNG and Samsung Heavy Industries.

During the 25 year term of the contract, LNGL will become a part owner of the FLNG vessel.