Good prospects

Papua New Guinea’s LNG industry appears to have a rosy future.

Papua New Guinea’s LNG industry is looking strong. Exports are expected to more than double over the next 10 years, as a result of planned expansion works. The PNG LNG project is due for a three-train expansion over the coming years, as Exxonmobil, Total and Oil Search pool their gas resources together. The plan will see PNG LNG’S export capacity expanded to 16 million tonnes per annum (mtpa) at an estimated cost of US$13 billion.

According to Fitch Solutions, a subsidiary of Fitch ratings agency, PNG is Asia’s fourth largest LNG exporter and on track to surpass Indonesia by 2019. Raphael Mok, Senior Country Risk Analyst with Fitch Solutions, says PNG has low cost, high quality gas and easy access to a number of high-growth gas demand markets in the region.

‘PNG remains the subject of intense investment interest to international oil companies,’ he says, noting plans to further develop the P’nyang, ElkAntelope and Western Province gas fields.

The possible standalone Western LNG project is ‘less certain’, says Mok. Horizon Oil and China’s Balang International are considering a proposed 1.5 mtpa LNG export project off Daru Island. Feed gas is likely to come from the combined assets of the two firms in the Western Province, including the Stanley, Elevala, Ketu, Tingu, Puk Puk, Weiman, Douglas and Langia fields.

Demand from the Asian region for natural gas will ensure that PNG’S LNG industry remains robust in the medium term, says David Lennox, Resource Analyst for financial services firm Fat Prophets. ‘The Asian region is very short of energy sources. PNG is one of the first movers. It is well established and successfully operating.’ 