PNG

PNG LNG ships first cargo

THE first shipment of LNG from ExxonMobil PNG's $US19 billion PNG LNG project has left Papua New ...

PNG LNG ships first cargo

As first gas from the project left PNG bound for Japan for Tokyo Electric Power Co on the Spirit of Hela tanker, ExxonMobil said the country had become a player in the global LNG market after the project was delivered ahead of schedule.

ExxonMobil PNG managing director Peter Graham said the support of government, community and co-venturers was critical to the project's completion.

"This announcement is a historic moment for Papua New Guinea," he said.

"This is the country's largest resource project and it has taken the effort of many thousands of people to bring it to fruition.

"With the support of government, our co-venturers and the local community, we are proud to celebrate the safe completion and first cargo from the PNG LNG project."

Graham said the project start-up positioned PNG as a resource-rich nation uniquely placed to deliver natural gas to meet the growing demand of Asia markets over the long term.

"Revenue from the PNG LNG project will support Papua New Guinea's continued economic and social development," he added.

"The PNG LNG project demonstrates to the world what Papua New Guinea is capable of delivering."

Production from the first train started in April, while production from the second train also started as additional wells came online.

Project construction began in 2010 and took more than 191 million work hours to complete.

At peak, more than 21,000 people were employed by the project, including more than 9000 Papua New Guineans.

More than 10.7 billion kina has been spent with PNG businesses.

Flooding, minimal pre-existing infrastructure and extremely steep slopes were among the obstacles that were overcome in constructing the project.

Pipe had to be airlifted in some areas because the soil could not support heavy machinery while the lack of infrastructure required construction of supplemental roads, communication lines and a new airfield.

PNG Prime Minister Peter O'Neill welcomed the first shipment as the Spirit of Hela began the journey to Japan.

"This project has brought significant economic benefits to our country that will last for generations to come," he said.

"Not only will the people of Papua New Guinea now benefit, their children and grandchildren will continue to enjoy the benefits and positive effects from this valuable resource development for many years to come.

The PNG LNG project is an integrated development that includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of PNG.

More than 700km of pipeline connects the facilities, which include a gas conditioning plant in Hides as well as liquefaction and storage facilities near Port Moresby with project capacity of 6.9 million tonnes of LNG per year.

The project is expected to produce more than 9 trillion cubic feet of gas over the estimated 30 years of operations.

It will provide a long-term supply of LNG to four major customers in the Asia region including China Petroleum and Chemical Corp (Sinopec), TEPCO, Osaka Gas and CPC Corp Taiwan.

The PNG LNG project is operated by ExxonMobil PNG in co-venture with Oil Search, National Petroleum Company of PNG, Santos, JX Nippon Oil & Gas Exploration Corporation, Mineral Resources Development Company (representing landowners) and Petromin PNG Holdings.

"The start of LNG shipments from the PNG LNG project is a momentous occasion for Oil Search, our co-venture partners and Papua New Guinea," Oil Search managing director Peter Botten said.

"It marks the delivery of the country's largest resource project, a project that is expected to more than double Papua New Guinea's gross domestic product and will transform the country into a significant supplier of LNG to key neighbouring Asian markets.

"In its first full year of operation, the project will quadruple Oil Search's production base and contribute more than $US1.3 billion annually to the company's operating cash flows.

"I would like to commend both the operator, ExxonMobil PNG Limited, on its safe and efficient execution of the project and Oil Search's many staff, both past and present, who have made significant contributions to bring this project to fruition."

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