The development of the P'nyang gas field in PRL 3 could fuel the expansion of the LNG gas plant through an additional LNG train.
PNG LNG will supply up to 20 million cubic feet of gas per day for 20 years to help the country improve the capacity and reliability of its power supply.
Up to 25 megawatts of electrical power will be provided to Port Moresby via the PNG LNG facilities for an interim period, while the government addresses long-term power generation options.
The remainder of the promised gas will be used to supply a state-owned power station located near the LNG plant.
Exxon said it intends to drill a P'nyang appraisal well within two years of attaining the development licence for the field.
The JV will also be awarded pipeline licences for the field, with a timeline set out in the MoU for a final investment decision to be made on the third LNG train by no later than the end of 2017.
Preparations are underway for appraisal drilling and development engineering studies, which will begin this year.
JV partner Oil Search said it was currently updating its resource estimate for P'nyang, which appeared to be bigger than the currently booked estimates.
"We are delighted that ExxonMobil, as operator of the PNG LNG project and PRL 3, has signed this MoU," Oil Search managing director Peter Botten said.
"This agreement meets the needs of all stakeholders. It will deliver much needed power to the people of PNG and provides an agreed timeline and activities for an expansion train at PNG LNG supported by P'nyang, a major gas field which is a key growth asset in Oil Search's portfolio.
"The arrangement supports the PNG government's vision to improve the delivery of long-term, reliable and accessible power in PNG. Importantly, it demonstrates how LNG developments, such as the PNG LNG project, can deliver both substantial export revenues and gas-for-power solutions to the local economy, for the benefit of all of PNG.
"Oil Search will continue to work with and support the government to deliver an integrated power solution for the nation."
