PNG LNG spot sales on the rise

Spot sales at the PNG LNG project are steadily increasing as the ExxonMobil-operated US$19 billion project is continuing to produce above its nameplate capacity, co-owner Oil Search said on Monday.

Papua New Guinea’s first LNG export project delivered 89 cargoes in total since it came onstream in April 2014. Out of these, 75 cargoes were sold under long-term contract while 14 were sold in the spot market, according to an Oil Search investor presentation.

The 6.9 mtpa LNG project produced at an annualised rate of approximately 8.1 mtpa in the third quarter, reaching its highest quarterly production rate.

LNG production at the plant located some 20 kilometers northwest of Port Moresby continued to rise hitting a yearly rate of about 8.2 mtpa in October, the presentation showed.

According to Oil Search, there is a”consistent demand” for spot PNG LNG volumes from Asian customers. The project has also been expanding its customer base beyond foundation customers – Tepco, Osaka Gas, Sinopec, and CPC.

Of the 14 spot cargoes sold to date, 9 went to Japanese customers, who like the PNG gas for its high heating value, Oil Search said.

Besides these short-term spot sales, the joint venture is also aiming to sell the spot volumes via long-term contracts after the recertification process for all of the PNG LNG fields is completed.

Oil Search expects the recertification process to result in a larger reserve base that could underpin long-term contracts for future spot LNG cargoes.

The PNG LNG project includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central Provinces of Papua New Guinea.

There are over 700 kilometres of pipelines connecting the facilities, which includes a gas conditioning plant in Hides and the two-train liquefaction facility near Port Moresby.

Besides ExxonMobil and Oil Search, other JV participants are Santos, National Petroleum Company of PNG, JX Nippon Oil and Gas Exploration, Mineral Resources Development Company, and Petromin PNG Holdings.

LNG World News Staff