What’s next for LNG in PNG?

The trans­for­ma­tional PNG LNG project has been ex­port­ing gas to Asian mar­kets since 2014. But what’s next for the project and its de­vel­oper, Exxon­mo­bil? Busi­nes­sad­van­tagepng speaks with An­drew Barry, the Man­ag­ing Di­rec­tor of Exxon­mo­bil PNG Lim­ited, to find

Business Advantage Papua New Guinea - - Petroleum & Gas -

An­drew Barry: My goal for Exxon­mo­bil PNG is that we con­tinue to main­tain the rep­u­ta­tion PNG LNG has built for be­ing a re­li­able sup­plier of LNG to our cus­tomers. We do this by re­main­ing fo­cused on our fun­da­men­tal val­ues: safety, se­cu­rity, en­vi­ron­ment, in­tegrity, ex­cel­lence and team­work.

Last year (2015) was an out­stand­ing year, with the PNG LNG fa­cil­i­ties op­er­at­ing at lev­els of ef­fi­ciency and re­li­a­bil­ity above our ex­pec­ta­tions.

We pro­duced 7.4 mil­lion tonnes of LNG in 2015, which rep­re­sents an in­crease of 7 per cent from the orig­i­nal de­sign spec­i­fi­ca­tion. The ben­e­fits of this in­creased pro­duc­tion are wide-rang­ing and in­clude ad­di­tional rev­enues for the Gov­ern­ment of Pa­pua New Guinea, landown­ers and pro­vin­cial gov­ern­ments.

Clearly, the in­dus­try is deal­ing with the chal­lenge of low crude oil prices. Exxon­mo­bil be­lieves prices over the long term will con­tinue to be driven by mar­ket sup­ply and de­mand, with the de­mand side largely be­ing a func­tion of global eco­nomic growth.

Our as­sess­ment is that PNG LNG op­er­a­tions will con­tinue to be suc­cess­ful in a va­ri­ety of mar­ket con­di­tions as a re­sult of our ap­proach to dis­ci­plined in­vest­ing, ex­pense man­age­ment, as­set en­hance­ment pro­grams, and a highly skilled and ded­i­cated work­force. im­prove the power-gen­er­a­tion ca­pac­ity in the coun­try, which will serve as a cat­a­lyst for more busi­ness and eco­nomic growth. We be­lieve that in­vest­ment in power gen­er­a­tion has the big­gest value-mul­ti­plier ef­fect of all po­ten­tial do­mes­tic mar­ket in­vest­ments.

The Me­moran­dum of Un­der­stand­ing that we signed with the Gov­ern­ment in Jan­uary 2015 pro­vides for the sup­ply of do­mes­tic gas to im­prove the ca­pac­ity and re­li­a­bil­ity of Pa­pua New Guinea’s power net­work. We de­liv­ered on the first phase of that com­mit­ment, to gen­er­ate 25 megawatts of elec­tric­ity, in just five short months.

The P’nyang field re­serves have the po­ten­tial to in­crease the sup­ply of do­mes­tic gas for power gen­er­a­tion and to also pro­vide en­ergy for fu­ture growth of the PNG LNG Project. We are con­tin­u­ing to work with the Gov­ern­ment on the pe­tro­leum de­vel­op­ment and as­so­ci­ated pipe­line li­cences for the P’nyang field, which are re­quired prior to our in­vest­ment and de­vel­op­ment of an ad­di­tional 50 megawatt gas-fired power sta­tion near the LNG Plant, on be­half of PNG Power. Exxon­mo­bil PNG’S An­drew Barry Richard Dell­man/exxon­mo­bil An­drew Barry: Exxon­mo­bil sup­ports the prin­ci­ple of co­op­er­a­tion when tech­ni­cally fea­si­ble and com­mer­cially at­trac­tive for both par­ties. I can’t spec­u­late on spe­cific com­pa­nies but what I can say is that, in the same way ma­jor projects have part­ners to help re­duce risk and cost by shar­ing the sig­nif­i­cant in­vest­ment costs, shar­ing in­fras­truc­ture be­tween projects is also an ef­fec­tive way to help man­age risk and cost.

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