Oil Search Spends USD 357.8 Million on PNG LNG in Q1

Oil Search of Papua New Guinea said it has spent US$357.8 million during the first quarter of 2012 on the PNG LNG Project.

The company a has a 29% interest in the LNG project.

Peter Botten, Managing Director of Oil Search, said:

“Visible progress was made at the PNG LNG plant site during the first quarter of 2012, with the ongoing erection of steelwork for both Trains 1 and 2, the delivery of the Train 1 main cryogenic heat exchanger to site and the outer shells of the LNG tanks taking shape.

Laying of the offshore pipeline also advanced significantly – by the end of the quarter, over 300 kilometres of the 407 kilometre pipeline had been laid. Route clearance, pipelaying, welding, trenching and pipe burial continued northwards towards Kutubu on the onshore pipeline route, while earthmoving activities at the Komo airfield continued, with record productivity achieved during the quarter.

Mobilisation of the first of two drill rigs from Lae to Hides took place during the period, with drilling on Hides expected to start in mid-2012. The second rig left Houston by ship and arrived in PNG in March.

Construction activities also continued on the Oil Search-operated Associated Gas (AG) and PL 2 Life Extension Projects. Mechanical completion of the first of two new gas dehydration units at the Central Processing Facility (CPF) was achieved in March.

Commissioning of the unit is now underway and it is expected to be operational in the second quarter of 2012. The second of the two major planned shutdowns at the CPF for AG related tie-ins was successfully completed, on schedule, in February.

Commissioning of the new CALM buoy and subsea pipeline for the PL 2 Life Extension Project also took place and tanker loadings through this new system commenced late in the quarter.

In January, a landslide occurred approximately five kilometres from the Hides Gas Conditioning Plant site in the Highlands. The local community suffered a number of fatalities and considerable damage was sustained to housing, land and a section of the Tari to Komo road, the main thoroughfare for the area.

The Government’s National Disaster and Emergency Relief Office worked very effectively to support those affected, initially with the provision of food, water and temporary housing and subsequently providing funding for permanent relocation. Road access was restored in February.

Both the Project Operator, Esso Highlands Limited, and Oil Search provided support where they could in response to this tragic incident. The Project experienced a number of minor isolated interruptions during the quarter.

The Project Operator continues to focus on working closely with local landowners and government to mitigate and manage these incidents.”

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LNG World News Staff, April 24, 2012; Image: Oil Search