Png Papua Gas Agreement

It also increases the financial burden on private stakeholders. The P`nyang gas agreement must be sealed before a complex pre-flow process for a larger associated liquefaction project can begin, with $13 billion of Papua LNG, led by Total, but also ExxonMobil and others, which is targeting IDF this year and production in 2024. The Papuan natural gas agreement is one of two agreements needed by Total and its partners Exxon Mobil Corp and Oil Search Ltd to pursue the LNG expansion plan. “Everything is going well, we can expect to sign a P`Nyang gas agreement towards the end of this month,” Kua said. The Papua Natural Gas Agreement, signed by all parties to the Total (operator), ExxonMobil and Oil Search joint venture, as well as by the government, was an important precondition for entry into the FEED phase of the Papua LNG project, while the signing of a gas agreement for the P`nyang field is a precondition for the launch of the supply phase of the downstream LNG development project. The proposal for the development of a gas field at P`nyang involves the construction of a third LNG train in the PNG-LNG project at Caution Bay, near Port Moresby, but is considered an integrated autonomous gas project, in accordance with the terms of a gas agreement. According to the government, the new gas agreement for P`nyang will be separated from the terms of the agreements for the initial PNG LNG project and the new Papua LNG project. Oil Minister Kerenga Kua said at the time that Papua`s LNG tax conditions were only a slight improvement over the original PNG LNG project. He added, however, that the government of Papua New Guinea expected the P`nyang agreement to continue and bring much better fiscal and economic benefits to the country.

Kua said the government had the option of postponing the P`nyang project until the new oil and gas laws and the revised tax system are introduced this year. Nevertheless, he said it was more advantageous to negotiate and sign the P`nyang gas agreement under the existing 1998 Oil and Gas Act. Oil and Energy Minister Kerenga Kua said the state team had negotiated on the basis of improved conditions for PNG over previous Liquefied Natural project agreements in the country. The companies had insisted that Total comply with the LNG agreement signed in April, and Oil Search warned in August that the cost of the project could increase if it was delayed by protracted discussions. Doubts about the gas deal intensified in August, when the government suddenly called for talks on revising the agreement. In response to Minister Kua`s comments, Peter Botten said: The CEO of Oil Search, that the government`s support is encouraging, and noted that the company is helping the operator and the government “resolve all the remaining issues relating to the Papua LNG gas agreement, so that the P`nyang gas agreement can be concluded and the PRL 15 and PNG LNG joint ventures can enter the engineering and frontal design phase of integrated development three trains. A state negotiating team led by Mr. Kua then reviewed the Papua LNG agreement and then managed to negotiate some of Total`s concessions. The agreement, signed nearly a year ago, proved unpopular with many leaders and led to the collapse of Peter O`Neill`s former government. Oil Search shares, which have fallen over the past three months amid uncertainty over gas deals, were up 2.1% shortly after the government`s announcement in a broader flat market. The government of Papua New Guinea has suspended negotiations with ExxonMobil for a gas deal for the planned development of the P`nyang gas field in the country`s western highlands.

Papua LNG is also facing a wave of global competitors aiming to increase demand for LNG in the mid-2020s and who may not occur. “A P`nyang gas agreement is a precursor to the entire LNG expansion project, which is competing for a rapid market opening

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