PNG LNG Records Record Production and Best Safety Performance

by PNG Business News - July 08, 2021

Photo Credit: Oil Search Limited

Despite obstacles posed by the Covid-19 epidemic, the Papua New Guinea Liquefied Natural Gas (PNG LNG) project had its greatest production and best safety performance since its inception, according to departing ExxonMobil PNG managing director Andrew Barry.

Barry said that the team achieved record LNG production levels, delivering the company’s best safety performance since production commenced while continuing to meet environmental and social commitments.

“EMPNG has completed over 70 million hours of work since production began and had no lost time incidents for more than three years, with no significant process safety events for almost seven years,” he said.

“A significant milestone was achieved on Sept 1 with EMPNG’s first shift fully managed and operated by qualified Papua New Guineans workers.

“This included the Hides Gas Conditioning Plant and Pipeline operations supervisors, and control room, field and pipeline technicians.”

By the end of 2020, the PNG LNG workforce would have grown to 2,784 workers and contractors, according to the annual PNG LNG environmental and social report issued last month.

Due to the suspension of several upstream region projects as a consequence of travel and limitations caused by the pandemic, this number was decreased from 3,964 employees at the end of 2019.

The overall workforce of the PNG LNG project is made up of 91% Papua New Guineans.

In 2020, EMPNG contributed K8.4 million to local communities in the form of contributions, sponsorships, in-kind assistance, and community-based initiatives.

The PNG LNG project's contract with ANU Enterprise Proprietary Ltd was renewed, allowing the community lifestyle improvement project (Clip), which began in 2015, to continue.

Clip is assisting communities in Hides, Juni, Nogoli, Angore, and Komo in gaining financial independence and improving their living conditions by providing training and assistance in areas such as nutrition, financial literacy, and agricultural practices.

The five-year head starts conservation initiative, financed by EMPNG and administered by the Port Moresby Nature Park, was also completed last year.

Last year, 36,650 stakeholders participated in over 5,400 community interactions, including over 2,000 official and roughly 3,400 informal encounters.

Community interactions were conducted in line with Covid-19 safe practices, with the majority of the engagements focusing on boosting Covid-19 awareness.

Through the infrastructure tax credit projects, an additional K57.4 million was spent on local infrastructure.

Since construction began, more than K10 billion has been invested in community projects and local infrastructure.

Peter Larden, EMPNG's new managing director, congratulated Barry for his six years of leadership, which had left a legacy.

“I look forward to building upon the standards he and EMPNG have set to further cement PNG’s reputation as a world class LNG producer and to be able to contribute in a sustainable and meaningful way to enhancing the communities in which we operate and the nation of PNG,” he said.



The National (6 July 2021). “Project records highest output”.

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PNG Business News - November 08, 2021

PNG LNG Earnings to Reach K15 Billion in 2021

According to a projection, total earnings from the PNG LNG project would reach US$4.5 billion (K15.4 billion) in the fiscal year 2021. According to estimates recently released by JMP Securities, PNG-based equity and fixed interest markets broker/dealer, Kumul Petroleum Holdings Ltd (KPHL) will earn between US$750 million and US$775 million (roughly K2.5 billion and K2.6 billion) from the project this year, based on current high prices. It also estimates that total earnings from the PNG LNG Project to KPHL have been to the tune of US$5.1 billion (about K17.5 billion) since the project began operations in 2014.  “This is an estimate of revenue only,” said JMP Securities. “We are not in a position to comment on the overall costs of operations associated with the project or the wider operations of KPHL,” “Given the current high international crude oil prices and the time lag between movements in oil prices and the pricing of LNG under long-term contracts, we expect continued benign trading conditions for PNG LNG in the coming months. “This will result in a strong performance for the 2021 financial year as a whole. “We estimate that the PNG LNG Project has sold LNG, condensates, domestic gas and naphta valued at US$30.27 billion between April 2014 and September 2021. “More than 80 per cent of revenues come from the sale of liquefied natural gas (LNG). “We estimate that the PNG LNG has sold the equivalent of close to 600 million barrels of oil since 2014. “Around 100 million boe (barrels) have been sold by KPHL. KPHL sells around 35,000 to 40,000 boe per day. “We estimate that the highest average quarterly gas export prices achieved by PNG LNG are US$14.41 (about K49.4) per mmbtu (metric million British thermal units). This was achieved in the June quarter of 2014 on modest volumes.” In the September 2021 quarter, PNG LNG achieved around US$10 (about K34.3) in average gas sales prices. “The lowest gas prices were achieved in the September quarter of 2020 – around US$4.2 (about K14.4) per mmbtu.”   Reference: Pacific Mining Watch (2 November 2021). “Papua New Guinea expects K15 billion from PNG LNG in 2021”.

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PNG Business News - December 08, 2021

PNG LNG Project Earns K11B

Photo credit: Oil Search According to ExxonMobil PNG Ltd, the PNG LNG project has earned K11 billion in revenue for the government thus far. This was announced by managing director Peter Larden at the recent PNG Mining and Petroleum conference. “Up to October this year, PNG LNG has generated K11 billion in revenue to the State and landowners, which obviously supports investments and services and infrastructure across the country,” Larden said. “In addition, K15 billion in business opportunities (were) generated across the country from the project.” Papua New Guineans made up more than 91 per cent of the company's workers, according to Larden. He also revealed some of the firm's plans. “In July this year, I announced the restart of Angore project which was suspended in 2020 because of the pandemic,” he said. “Angore was part of the original project development plan. “This year, we engaged with the Government and the State Negotiating Team on the P’nyang LNG project. In September, we entered into an important head of agreement in Houston, Texas. “Since that time, we have been in active discussions on the gas agreement and we remain committed to progressing those to a conclusion. “P’nyang will construct new upstream facilities in Western and link them with existing pipeline infrastructure and the LNG plant in Caution Bay. “It will be an in an independent project, covered under a future benefit-sharing agreement. “Gas from P’nyang will support domestic power supply, improving access to electricity power to Western and surrounds. “We are also proud to be part of the Papua LNG project. Momentum is building with studies underway with front-end engineering set to begin next year. “The two projects could last up to a decade of continuous construction activities. “This would be significant to the country with potentially more than K65 billion.”   Reference: Pacific Ming Watch (6 December 2021). “PNG LNG generated K11billion revenue”.

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