InterOil in the press..
INTEROIL and Japan’s Mitsui & Co have signed a joint venture operating agreement for the proposed $US550 million ($A600 million) condensate stripping facility at Interoil’s Elk and Antelope fields in Gulf province, Papua New Guinea.
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The JV agreement replaces the preliminary works agreement signed in April for the condensate stripping facility.
Under the new agreement, Mitsui and InterOil will each have a 50% ownership stake in the facility which is estimated to cost $US550 million with around $US32 million of this expended for front-end engineering and design.
Mitsui will be responsible for arranging or providing financing for the capital costs of the plant.
The two companies also signed an option deed under which Mitsui has options to acquire an interest of up to 5% in the Elk and Antelope fields and in the proposed liquefied natural gas project once a final investment decision on the condensate stripping facility has been made.
Mitsui will have the right to convert its contributed investment in the condensate stripping facility into a 2.5% interest in the Elk and Antelope fields and proposed LNG project after mechanical completion of the facility.
The company will also have conditional rights under a separate call option to purchase an additional 2.5% interest.
The condensate stripping project is aimed at processing 400 million cubic feet of gas to yield about 9000 barrels of condensate per day.
Dry gas will then be reinjected into the reservoir for storage until the proposed Liquid Niugini Gas LNG facility has been built.
Front-end engineering and design work on the project has been ongoing since April with a
final investment decision on the project expected by the end of March 2011.
The plant is expected to be operational by no later than mid-2013.
If a positive FID is not reached, InterOil will be required to refund Mitsui’s capital expenditure incurred within a specified period, and the option and conversion deeds will be terminated.