Papua New Guinea Government Prefers Exxon, Total Pursue 2nd LNG Project
Papua New Guinea is backing a new greenfield liquefied natural gas facility led by France’s Total SA in addition to an expansion of the existing $19 billion Exxon Mobil Corp. PNG LNG project.
The Pacific nation expects its gas reserves to feed both PNG LNG as well as the separate Papua LNG venture, according to WapuSonk, the managing director of Kumul Petroleum, the state oil company. Plans to develop both projects have been in doubt since Exxon bought a stake in natural gas fields that were originally slated for the second project and said it intends to funnel that gas through PNG LNG.
“Exxon has been operating in the country for a long time and it knows what the government wants,” Sonk said in Singapore on Wednesday. “That’s two supermajors and two separate projects.”
Papua New Guinea’s abundant resources, lower taxes and cheap labor are a bright spot as LNG developers, punished by slumping prices amid a global glut, seek to delay investments and cut costs through integration.
Exxon agreed in July to pay as much as $3.6 billion for InterOil Corp., which discovered the vast Elk-Antelope gas field meant to underpin the Total-led Papua LNG project. InterOil said Wednesday that a majority of stockholders approved Exxon’s acquisition.