The changes are not unexpected as InterOil and joint venture partner Pacific LNG were under a lot of pressure from the PNG government to change the previous concept.

The new model confirms that the previous proposal of a mid-scale modularised onshore plant, combined with a floating LNG vessel, is no longer an option.

In its place is a single onshore LNG train of 4 million tpa, which InterOil said it hopes to bring on stream in 2016, followed by a second identical train two years later.

Project capital expenditure for the two-train project is between $8.3 billion and $9.3 billion. Plans also accommodate a potential third train.

InterOil said a major cost saving has been achieved by changing the location of the proposed LNG plant from the Port Moresby area to the Bluff area closer to InterOil’s Elk-Antelope gas and condensate fields, which are the feedstock source.

The company said it is “ready to go” to a final investment decision “as all project segments are financeable, but is dependant on PNG government permits, licences and land”. The contracting strategy could not be confirmed as Upstream went to press.

There are other unknowns, including the government’s response to the new plan, and the big issue of which major company will join the project as operator.

The PNG government had previously instructed InterOil to introduce an LNG major, and it is understood InterOil has received six offers from companies, including Shell, Chevron and national oil companies.

Once a partner is introduced, InterOil said the type of LNG technology would be selected.

InterOil claims it has already used world-class LNG contractors such as WorleyParsons, Siemens, Mitsui, Toyo Engineering, Hyundai and EDG. There are other uncertainties, including the project’s gas reserves, although InterOil takes a positive view, with third-party evaluations giving a low estimate of 6.19 trillion cubic feet of sales gas and a high estimate of 9.94 Tcf of sales gas.

There are also understood to be uncertainties over the equity ownership of the gas.

InterOil has just spudded the Antelope-3 onshore appraisal well in a bid to prove up field reserves, and also plans to soon drill the Elk-3 development well.

In terms of LNG offtake, there are four heads of agreements in place for a total of between 3.3 million tpa and 3.8 million tpa, with Noble Group, Gunvor, ENN Energy and a Philippines power project.