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

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.