Papua New Guinea LNG project on schedule for 2014 startup

Singapore (Platts)--24 Jan 2013 657 am EST/1157 GMT

ExxonMobil's Papua New Guinea LNG plant is on schedule to start up and ship its first LNG in 2014, Peter Botten, Managing Director of minority project shareholder Oil Search, said at a conference Thursday.

The 6.9 million mt/year, two-train LNG plant, supplied with feed gas from three gas fields in the highlands and associated gas from existing oil projects, will supply LNG to Japan's Tepco and Osaka Gas, Taiwan's CPC, and China's Sinopec on long-term contracts, Botten said at the the LNG Supplies for Asian Markets conference in Singapore.

"We have not deviated from the schedule, we are still looking at a 2014 startup, and the operator (ExxonMobil) confirmed that they are still on target," Botten said.

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The key construction objectives this year will be on well drilling, completion of the Hides gas plant, and the onshore pipeline. The Hides gas conditioning plant will have capacity of 1 Bcf/day, and will be completed later this year, Botten said.

The cost of the Papua New Guinea LNG project rose to $19 billion from $15.7 billion, mainly due to exchange rate movements and work stoppages related to community issues, ExxonMobil said in November.

Oil Search holds 29% in the PNG LNG project, while ExxonMobil holds 33.2% and Australia's Santos holds 13.5%. The remaining equity is held by the government's National Petroleum Company of PNG (16.8%), JX Nippon Oil & Gas Exploration Corporation (4.7%) and PNG landowner group Mineral Resources Development Company (2.8%).

--Max Gostelow,
--Edited by Martin O'Rourke,

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