Well, quite a lot, as it turns out. They have a refinery handy, and can export other stuff like naphta…
OIL products like diesel, petrol, jet A-1 fuel and kerosene processed at InterOil’s planned stripping plant facilities in Gulf province will be sold in the local market, chairman and chief executive Phil Mulacek disclosed yesterday. However, naphtha, another oil byproduct, will be exported to Japan buyers that included Mitsui Group, Mulacek said.
He said the stripped oil by-products will undergo final processing at its Napa Napa refinery.
Mr Mulacek said these are some of the salient points of a deal InterOil signed with Mitsui Group representatives last week, in which the putting up of a condensate stripping plant has been agreed.
The deal referred to as key terms agreement (KTA) calls for a US$450 million (K1.216 billion) lending facility to cover 100% of the remaining costs of the processing and sale of condensate from the Elk and Antelope fields in Gulf province.
Prime Minister Sir Michael Somare as trustee shareholder of Petromin PNG Holdings Ltd witnessed the signing. Petromin is the nominee for the State’s 22.5% equity in the upstream. The InterOil’s gas condensate (liquid gas) stripping plant and associated support facilities will be located in Gulf province. The condensate would be stripped and shipped to Port Moresby.
Mr Mulacek said: “Our current plans are to further process condensate at the refinery at Napa Napa.
“We would keep the diesel, petrol, jet A-1, and kerosene for local market and export naphtha to Mitsui and other buyers. “If the volumes exceed our processing capacity, we could either debottleneck the refinery and expand the refinery, or sell some surplus condensate on the open market.”
The condensate stripping is the initial phase of InterOil’s LNG project development while, at the same time, it will be developing a LNG processing plant to convert dry gas to liquid gas for further refining and export.
That phase of the project, including the laying of a carrier pipeline, will be completed and will come into full operation by late 2014 or early 2015.
InterOil’s Napa Napa refinery provides an essential infrastructure in the entire LNG value chain. Mr Mulacek said the condensate stripping phase of InterOil’s project will give early monetary benefits to stakeholders that included the State, the Gulp provincial government, landowners, and InterOil’s equity partners. This will come once the first shipment of condensate is processed and sold, he said.
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We especially like that phrase where Mulacek argues that if volumes exceed the processing capacity of the refinery. You have to be aware that the processing capacity currently stands at 36,500 barrels a day to realize what’s going on here…