Acting through its subsidiary, Gas Link Global, LNG Limited has acquired equity in two Foreland exploration leases and one Gulf of Papua retention lease, and is seeking gas access from existing proven gas resources held by third parties.
Gas Link Global has also bought a 20% stake in a PNG-focused junior explorer, Papua Petroleum, which aims to list on the Australian Securities Exchange later this year and holds three petroleum prospecting licences and one exploration licensee application in the Foreland region.
Papua Petroleum and LNG Limited have entered into a gas supply heads of agreement covering specific commercial terms for the supply of sufficient gas from any commercial gas discoveries in PNG for an LNG project of at least 1MMtpa.
“The HoA specifies that the delivery point for the gas will be along the PNG coastline, with [Gas Link] responsible for the cost of the gas pipeline from the delivery point to the LNG project,” LNG Limited said.
“The company is currently actively reviewing both onshore and offshore LNG project locations in the Forelands region and Gulf of Papua and the LNG project will be capable of expansion in line with gas supply availability.”
LNG Limited said it hopes to list Gas Link Global on the Australian bourse this year to assist in funding ongoing growth in its gas activities.
LNG Limited said it would be using a “proven technology which is simple, reliable, efficient and low cost, with a fast development schedule when compared to traditional large-scale LNG projects using processes such as propane-mixed refrigerant”.
The company said it had completed the design, engineering and costing for a mid-scale LNG plant with train capacities in multiples of 1MMtpa. It has appointed WorleyParsons to undertake an audit of the “LNG package” that will be used for the company’s projects.
LNG Limited is also working on preliminary design and costing for a floating LNG plant and is in the process of establishing a consortium to undertake the joint development.
Meanwhile, LNG Limited still has no news on its proposed Padang LNG project in Indonesia.
The $US500 million ($A605 million), 1.8MMtpa LNG plant in Sulawesi was one of the company’s main projects, and a final supply contract for gas from the nearby Senoro fields was due to be awarded in November last year.
The gas was expected to come from the 1.6 trillion cubic feet Senoro field and later the nearby Matindok gas field, with commissioning of the Senoro fields scheduled for April 2009. But now the deal is looking dubious.
LNG Ltd secured an exclusivity gas supply agreement with Indonesia’s government-owned energy producer PT Pertamina and PT Medco, which jointly own the Senoro gas fields.
But media reports in December claimed Pertamina instead decided to join Japanese giant Mitsubishi in a separate $800 million LNG plant.
“The company is continuing to monitor the progress by [gas suppliers] Pertamina and Medco in relation to their preferred partner to develop the Padang LNG project in central Sulawesi, Indonesia,” LNG Limited said yesterday.
“Any final decision by the gas suppliers will require Government of Indonesia approval and the company has been actively representing its concerns in relation to the selection process, prior commitments to the company pursuant to the exclusivity agreement signed in May 2005 and given subsequently (on the basis of which the company expended considerable funds in good faith), and the significant loss of revenue to the Government of Indonesia due to the continuing project delays.”
Meanwhile, LNG Limited has also been reviewing other opportunities in Indonesia.
“The substantial development and engineering work undertaken for the Padang LNG project can readily be applied to other LNG projects and provide for the fast-track monetisation of existing proven gas resources,” the company said.
