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 projects.

"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 Thursday.

Petromin is a PNG government company formed to hold the state's assets and maximize indigenous ownership and revenue from the mineral and petroleum sectors.

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 pursue together.

"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 Executive Council.

--Christine Forster, christine_forster@platts.com

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