The gas agreement defines the terms under which the venture will build and operate the project including taxation, fiscal and banking stability, issue of development licenses, state participation, landowner identification, training and local business development.
The joint operating agreement, signed on March 13, 2008, and the gas agreements are the key commercial agreements that have enabled PNG-LNG to formally enter into the front-end engineering design (FEED) stage.
The FEED work will be conducted over 16 months with a final investment decision expected in the fourth quarter of 2009. FEED activities will include detailed work on optimizing facilities design, landowner, environmental and regulatory affairs, and the selection of an engineering, procurement and construction contractor.
In parallel, the venture will be marketing the liquefied natural gas (LNG) to potential buyers in Asia and elsewhere, while it implements its financing plan.
The PNG-LNG project reportedly has the potential to become the largest project ever undertaken in Papua New Guinea (PNG). The project envisages an integrated development of the Hides, Angore and Juha gas fields, as well as associated gas from the Kutubu, Agogo, Gobe and Moran oil fields.
The gas will be transported to the LNG plant near Port Moresby, PNG, through more than 700km of large diameter pipeline. The first LNG cargo is expected to be shipped in early 2014.
