Business Advantage Papua New Guinea
Exclusive interviews with the biggest players in the PNG resources industry, including updates on the most important prospective projects.
Papua LNG, Papua New Guinea’s next major LNG project, is getting closer.
Production from the Papua LNG project in Papua New Guinea could start in 2024 according to Jean-marc Noiray, Managing Director of Total E&P PNG. The French super major Total will look to have a final gas agreement with the Papua New Guinea government by March 2019.
In November 2018, Total signed a memorandum of understanding with the Government. Patrick Pouyanné, Chairman and CEO of Total described it as an ‘important step’, adding that investing in LNG is a ‘long-term’ enterprise.
‘Total, being the second-largest private LNG player in the world—we are fully committed to the success of the Papua LNG project, which benefits from a favourable geographical location close to Asian markets.’
Total is the operator of the Elk and Antelope onshore fields; it is the largest shareholder in PRL-15 with a 40.13 per cent interest. Exxonmobil and Oil Search are partners. There is believed to be significant exploration potential in nearby formations.
Noiray says Total is looking to start a conclusive engineering study in the second quarter of 2019 and to make a final investment decision before 2020. ‘We sometimes call it a “deep onshore operation”, meaning it is so remote in pristine jungle. The challenges are enormous from a logistical point of view and an environmental point of view. We have to respect the environment in which we work. The most important thing is the relationship with the communities and land owners.’
Confidence
Noiray says the appraisal drilling conducted on the Elk and Antelope fields in Gulf Province is now complete, and Total is ‘now pretty confident’ that the sites will ‘feed, over a 15 years plateau, 5.4 million tonnes per year’ of LNG production.
‘ We have done a lot of work in our studies. We have completed the PRE-FEED [front end engineering and design] studies, which are a lot more advanced than is usual. We have done a lot of exhaustive surveys trying to anticipate the challenges that are coming: from the logistic point of view, the topographic issues and the poor soil quality.
‘It was important to understand the navigability. Most of the reserves are at Antelope, actually. One of the most challenging parts of the construction will be the onshore pipeline, which is 60 kilometres.’ Noiray says Total will be joining forces with the PNG LNG project to ‘create synergies.’
Pouyanné told the APEC CEO summit in Port Moresby that natural gas and renewables-based electricity will be ‘at the core’ of energy supplies in the future. ‘It is a mistake to avoid all energy [sources]. We need all of them. For example, there are not yet replacements for hydrocarbons which provide the intensity of heat required for heavy industries like steel, cement, and many chemical processes.
‘ When we look to the future, there are two energies which will be at the core of the evolution, the energy landscape. One will be natural gas. Why? Because it is clean. It emits half as much carbon as coal.’