Not really surprising but it’s good to read nevertheless. Things are moving…
BUSINESS INTELLIGENCE: Inter Oil ready to start
Development for Papua New Guinea’s second LNG project is set to start this year. The project is led by InterOil Corporation while the first PNG LNG project is led by ExxonMobil and Oil Search. InterOil Corporation will develop a gas condensate (liquid gas) stripping plant onshore in Gulf province. The development will start this year. InterOil is understood to be considering kick-starting the project as soon as its front end engineering and design (FEED) approval and final investment decision (FID) are made towards the end of the first quarter of this year.
The condensate stripping plant is a forerunner in commercialisation and monetisation of InterOil’s four massive Elk-Antelope natural gas discovery wells at Upper Purari River in Gulf province. The condensate stripping plant will be fully operating as value-added commercial entity long before both the InterOil-led and the ExxonMobil-Oil Search-led LNG projects become fully commercial in late 2014 or early 2015.
InterOil, the State through its nominee company Petromin Limited and Japan’s Mitsui group of companies recently signed Key Terms of Agreement (KTA) for a $US450 million (about K1.350 billion) loan to be facilitated by Mitsui to develop the plant and associated enabling infrastructure—all of which will be located entirely onshore in the Gulf province.
The initiative is an InterOil-led strategy to create a conducive and an enabling environment within which the company—in partnership with landowners, Gulf government and the people of the province in unison—will drive forth gainful and value-added economic and social development programs and projects for development-starved Gulf province and PNG overall.
InterOil has explained this exciting initial phase of their natural gas commercialisation and monetisation plan when asked by the media for clarification on the condensate stripping project as a separate venture to the LNG project and the status of Mitsui’s involvement. They company responded: “Yes, Mitsui has asked to be the sole partner for the condensate stripping plant, knowing that others may join later.
“The construction of the condensate stripping plant is not part of the LNG project agreement. InterOil is looking at an offshore LNG plant in conjunction with on-shore facilities (and) more studies will need to be done. “The condensate (liquid gas) stripping plant will be on-shore and located entirely in Gulf province. The condensate will be stripped and shipped to Port Moresby. “We expect (to) start construction this year after FEED and FID are agreed.”
InterOil CEO and Chairman Phil Mulacek said: “Our current plans are to process condensate at the refinery at Napa Napa after the condensate is shipped to our Port Moresby-based refinery. “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 and expand the refinery, or sell some surplus condensate on the open market.”
Mitsui Group is one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world. Mitsui Group has interests in LNG and petrochemicals, among other industries, and is recognised as one of the largest traders in naphtha and high quality petrochemical products.