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Things falling into place II

April 1st, 2010 · No Comments

From Platts, with love…

If you prefer the whole pdf version: Platts-march31-2010

  • Tokyo—InterOil has reached a preliminary agreement with a Japanese partner for a liquids stripping project that would be a precursor to InterOil’s planned LNG development in Papua New Guinea, sources close to the matter said Tuesday. The liquids stripping project would start up in 2012 and would involve the processing of 400,000 Mcf/d of gas to produce 10,000 b/d of condensate, the sources said.
  • “Condensate stripping and gas recycling is the first step in a successful LNG project,” a source told Platts. Should the deal with the Japanese partner be formalized, the condensate stripping operation would generate early cash flow to underpin InterOil’s planned LNG project in Port Moresby, the source added. The gas for the condensate project would come from InterOil’s Elk and Antelope fields in the Eastern Papua Basin, which also are being developed to supply the LNG project.
  • The agreement on the liquids project was struck prior to a ceremony in Tokyo, during which Papua New Guinea’s stateowned petroleum and mining company, Petromin PNG Holdings, and Japan Petroleum Exploration signed two memoranda of understanding for technological cooperation and training engineering personnel for the energy sector.
  • The MOUs were signed by Petromin CEO Joshua R. Kalinoe and Japex CEO Osamu Watanabe, in the presence of PNG Prime Minister Michael Somare. The parties plan to finalize the agreements by June. Japex, which is 34%-owned by Japan’s Ministry of Economy, Trade and Industry, has provided training and technical services to energy sectors in a number of oilproducing countries, including Iraq. In an interview with Platts March 15, Watanabe said Japex had begun “studying various options” to import more LNG by participating in upstream gas assets “by 2018-2020.” Speaking to Platts on the sidelines of the signing ceremony, Somare said, “We are very proud of the fact that the Japanese partnership is now coming in and making a commitment for developing the (liquids) project.”
  • Petromin PNG is expected to acquire a 20.5% stake in InterOil’s LNG project, with a further 2% to be held by local landowners directly impacted by the plant. Somare said he does not foresee any issues with local residents related to the project. InterOil has “proven reserves, which we believe (it) would be able to develop at the same time,” the premier said when asked about the prospects for the LNG project. InterOil and its partners plan to build a two-train liquefaction facility with combined capacity of 8 million mt/yr (equivalent to 1 Bcf/d of gas). The project is expected to cost $7 billion.
  • InterOil now estimates it would be able to bring the first 4-million-mt/yr train online in 2015 and the second train nine months later, the source close to the project said. The plant was previously expected to start operating in 2014-15. InterOil previously said it was talking with potential partners in Japan, Korea, China and India, including China National Offshore Oil and PetroChina, as well as India’s Petronet and GAIL, for the potential sale of a combined 25-35% stake in the LNG project.
  • Most of the equity would come from InterOil’s 58% interest, while Clarion Finanz subsidiary Pacific LNG would reduce its stake to 12% from about 20%. InterOil and its partners are in “final negotiations” to select a partner, “as there are several Japanese companies that have expressed interest in becoming partners in the condensate and the LNG project,” said the source, declining to elaborate.

Tags: IOC