France’s Total and its partners Oil Search and Exxon Mobil have signed a deal with Papua New Guinea that will allow initial work to start on Papua LNG project.


Image: The Papua LNG project is expected to unlock over 1 billion barrels of oil equivalent of natural gas resources. Photo: courtesy of Total.

The Papua LNG Project aims to commercialize gas associated with the Elk-Antelope fields located in the PRL-15 concession in Gulf Province.

The gas agreement, which defines the fiscal framework for the Papua LNG Project, allows the partners to enter the Front-End Engineering Design (FEED) phase of study. This work will lead to the final investment decision in 2020.

The deal includes a Domestic Market Obligation (DMO) which will provide gas for sustainable future domestic usage, as well as a deferred payment mechanism for the State’s payment of past costs.

Additionally, the agreement includes National Content which supports local workforce development.

Total chairman and CEO Patrick Pouyanné said: “We are very pleased with the progress of this competitive LNG project that benefits from the brownfield synergies with existing liquefaction facilities and the proximity to Asian markets.”

The Papua LNG Project will comprise two LNG trains with a capacity of 2.7 MTPA each and will be developed in synergy with the already built PNG LNG project facilities.

Oil Search managing director Peter Botten said: “Oil Search’s focus will now move to working with PRL 3 operator, ExxonMobil, and the State to close out an agreement with the State for the development of the P’nyang field and the commencement of the FEED phase for the proposed three-train integrated development at the PNG LNG plant site.

“This will also include FEED for the Associated Gas Expansion (AGX) Project, operated by Oil Search. FEED is expected to result in a Final Investment Decision in 2020, which will ensure that first production from our new, globally competitive, LNG trains is available in 2024.”

Total is the operator of the Elk and Antelope onshore fields with a stake of 31.1% in PRL-15 while ExxonMobil and Oil Search hold stakes of 28.3% and 17.7%, respectively. The remaining stake is held by government and landowners.

The Papua LNG project is expected to unlock over 1 billion barrels of oil equivalent of natural gas resources.