Shell opens office in Papua New Guinea in pursuit of LNG opportunities
Sydney (Platts)--9Feb2012/248 am EST/748 GMT
Shell has opened a representative office in Papua New Guinea, where the
Anglo-Dutch oil and gas major is pursuing the potential for LNG export
"The opening of the office affirms Shell's interest to invest in PNG and
offers opportunities for us to work more closely with our partner, Petromin,"
Ton Ten Have, Shell's vice president commercial Asia, said in a statement
Petromin is a PNG government company formed to hold the state's assets
and maximize indigenous ownership and revenue from the mineral and petroleum
Shell and Petromin established a long-term partnership on August 18,
2011, with the signing of a strategic alliance agreement. The alliance
includes a joint technical study of PNG's major hydrocarbon basins to
evaluate exploration opportunities that Shell and Petromin would look to
"Shell and Petromin are making good progress in our strategic alliance
agreement and joint technical study agreement," Ten Have said. "The JTSA is
on track to be completed this year and we look forward to working with
Petromin to build a successful upstream business in PNG," he added.
"Shell believes that PNG is underexplored and the country offers
potential for development. We are very keen to invest and develop business
opportunities in PNG," Ten Have told the office opening ceremony in Port
Moresby. "We have a proven track record in managing large-scale and complex
projects worldwide with outstanding results, we also offer integrated
solutions across the value chain which includes marketing LNG," he said.
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Ten Have cited Shell's 80-year history developing oil and gas in
partnership with the national oil company of Brunei. "We envision developing
a similar partnership with PNG in the long term to help make PNG one of Asia
Pacific's most important producers of oil and gas and a reliable supplier of
energy supporting the region's rapidly growing economies," he said.
Shell also pointed to its new floating LNG technology, which is being
deployed for the first time at the Prelude gas field in the Timor Sea off
northwestern Australia, as giving it the capability to tap
"difficult-to-reach natural gas deposits."
The company approved the development of the Prelude field using a 3.6
million mt/year floating LNG facility in May 2011. The Prelude project is
expected to cost about $12 billion and is scheduled to start up around 2017.
PNG is an emerging player in the Asia Pacific LNG market. US giant
ExxonMobil is currently constructing a 6.6 million mt/year LNG plant near
Port Moresby at a total cost of $15.7 billion. The project, scheduled to
start up in 2014, is held by ExxonMobil (33.2%) alongside PNG-based Oil
Search (29%), Australia's Santos (13.5%), the PNG government's National
Petroleum Company of PNG (16.8%), Japan's Nippon Oil Exploration (4.7%) and
PNG landowner group Mineral Resources Development Company (2.8%).
US-based junior InterOil has also agreed with the PNG government to
pursue a 7.6 million-10.6 million mt/year LNG export project based on gas in
its Elk and Antelope fields. That project is running behind schedule,
however, and InterOil last year found itself at the receiving end of
government criticism that the development it was pursuing did not meet the
terms of its December 2009 agreement and had been rejected by the National
--Christine Forster, email@example.com