Interoil chooses Total SA for second LNG project
Interoil Corporation has announced it is teaming up with France’s Total S.A. to develop Papua New Guinea’s second LNG gas project at the Elk and Antelope fields in Gulf Province. How will the new project fit into PNG’S existing LNG landscape?
In December 2013, Interoil finally selected a development partner for its Elk and Antelope gas fields in PNG’S Gulf Province. French major Total SA will pay up to US$3.6 billion (K9.01 billion) for a 61.3% stake in the fields.
The final price will depend on the extent of the reserves, which will be known after a US$325 million (K816 million) drilling program. A company statement said the drilling campaign will take between 12 and 15 months.
The France-based conglomerate is the fifth-largest publiclytraded oil and gas company in the world. Its deal with Interoil represents its first entry into the PNG petroleum development industry.
Oil Search Limited, one of the key players involved with PNG’S existing LNG project, the Exxonmobil-led PNG LNG project, has also joined the venture, acquiring 23% of Elk and Antelope fields from Pac LNG in March 2014.
Oil Search managing director Peter Botten told investors he paid beyond the ‘resource value’ of Pac LNG’S stake to have the ability to leverage more value.
‘With us sitting where we’re at in both joint ventures, and having a range of other gas resources, we’re uniquely situated to drive the future of LNG in PNG,’ he said.
Integration with the PNG LNG project?
‘The Elk/antelope field is the largest undeveloped gas field in the region and it would certainly be advantageous for Oil Search to have a significant say in the development of that field,’ David Lennox, senior analyst with stockbrokers Fat Prophets, tells
‘They have a significant interest in the PNG LNG project that will soon be coming into production and they will be wanting to shore up the supply of product into those [two] trains, and have the potential ability to perhaps build an additional train on site with extra gas that could be supplied from Elk/antelope.’
‘It would be a little difficult at this point in time to predict who will have the biggest say when it comes to developing Elk/ Antelope. It’s not at that stage. It’s got to get there yet and until it is actually proven to be commercial, everyone’s going to remain pretty quiet.’'
Petromin Holdings chairman Sir Brown Bai welcomed the Total deal. Petromin is the state nominee for the Elk/antelope project, although Prime Minister O’neill flagged in early 2013 that the organisation may be re-named Kumul Petroleum under a major reorganisation of State-held assets.