Shell and ExxonMobil court InterOil for new LNG project
The super major companies Shell from The Netherlands and ExxonMobil from USA are head to head in intensive negotiations with InterOil Corporation (InterOil) for the development of world scale liquefied natural gas (LNG) projects in Papua New Guinea (PNG).
Listed in New York Stock Exchange, InterOil was established in 1997 to take a leading role in the energy sector of Papua New Guinea.
After the first discoveries in Moose in 2005, the Elk and Antelope appeared to be promising enough to support a LNG project.
In 2010 GLJ Petroleum Consultants estimated the resources in:
– Elk to 631 billion of barrel equivalent oil (boe)
– Antelope to 1.52 billion boe.
As a result in November 2012, the Government of Papua New Guinea decided to increase its stake in the Gulf LNG Project from the original 22.5% to 50%.
In addition and in order to secure the flawless execution of the project, PNG Government and InterOil decided to set partnership with a major company providing its technological expertise and project management experience for a world scale LNG project.
This first phase should come on stream in 2016 and should be followed up by a second and a third phase expected to start commercial operations in 2018 and 2020.
Gulf LNG in competition with PNG LNG expansion
– 11 production wells in Elk and Antelope fields
– Water injection wells
– Compression facilities
– 100,000 barrels condensate storage facilities
– Condensate offloading facilities to ships
– Three LNG Trains of 3.8 million t/y each
– LNG storage tank farm
– LNG export terminal with connecting and offloading system
– Offsites and utilities
ExxonMobil is currently completing the $19 billion construction of the two first LNG Trains in Papua New Guinea where the existing infrastructures were designed to support two additional trains with a capacity of 6.9 million t/y.
In a way the PNG Government realizes that ExxonMobil solution offers the simplest and most profitable solution to develop the Elk and Antelope gas fields but in another way the partnership between Shell and InterOil would balance ExxonMobil position in Papua New Guinea.
For these reasons, it could also be that InterOil and Papua New Guinea Government decide to develop both projects, first Gulf LNG Train with Shell, and third PNG LNG Train with ExxonMobil in parallel in order to avoid further delays to sign LNG export agreements.