Interoil: PNG Wants to Scrap LNG Project

InterOil  said today that the Papua New Guinea government plans to cancel an agreement for an LNG project in the country.

The company said in a statement that it has received through an unofficial channel, from the Department of Petroleum and Energy (DPE), of a copy of a notice of intention to cancel the 2009 LNG Project Agreement between Liquid Niugini Gas Limited and the Independent State of Papua New Guinea.

“Having considered the issue carefully with our external advisers, we are strongly of the view that the State has no right at present to terminate the Project Agreement,” InterOil said.

The company said that the notice does activate a six month consultation period during which the parties are to explore steps to deal with or remedy the DPE’s concerns.

“Our sell down and partnering process has now reached a stage where we expect to be able to demonstrate to the DPE, in the coming weeks, our ability to abide by all of the terms of the 2009 LNG Project Agreement.”

“This accords with our stated intention since the previously announced engagement of advisors for this process at the end of last year,” Interoil said.

“InterOil, and the partner we select, intends to bring an LNG processing facility to Papua New Guinea of a nature and in a manner which will be satisfactory to the State,” the company added.

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LNG World News Staff, May 14, 2012