ExxonMobil has reached an agreement on a fiscal framework with the government of Papua New Guinea to develop the P’nyang liquefied natural gas (LNG) export project.
The project would deliver LNG by constructing new upstream facilities in the Western Province linked to existing infrastructure.
The agreement also supports project scoping and evaluation, but still hinges on a final investment decision. The P’nyang field is estimated to have 4.36 Tcf of natural gas.
“The P’nyang project gas agreement marks a significant milestone and underscores the intent of all stakeholders to set a clear framework toward the P’nyang project’s future development,” said Liam Mallon, president, ExxonMobil Upstream Oil and Gas.
The P’nyang development in Western Province is proposed to commence following the Papua LNG project, which will be located in Gulf Province.
TotalEnergies SE said during a recent earnings call that it could sanction the 5.4 million metric tons/year Papua LNG project in 2023.
Papua New Guinea LNG projects are considered some of the lowest-cost projects in the world. ExxonMobil has been producing LNG since 2014 from the PNG LNG project.
P’nyang will be an independent project with landowner benefits to be provided under a future benefit sharing agreement to be negotiated by the government, ExxonMobil said. ExxonMobil is continuing to work with the government regarding their interest in purchasing additional equity in the project.
The P’nyang project would provide about four years of additional construction activity after Papua LNG and “drive economic benefits for the country and participating provinces,” ExxonMobil said. Upon completion, the P’nyang project would make available up to 5% of gas produced to the local market.
The P’nyang field is located within Petroleum Retention License 3, which covers 105,000 acres. ExxonMobil subsidiary Esso PNG P’nyang Ltd. holds the license and together with Ampolex (Papua New Guinea) Ltd. holds a 49% interest. Affiliates of Santos Ltd. (38.5%) and JX Nippon (12.5%) hold the remaining stakes in the project.
