No impact on PNG LNG: Sonk
There has not been any impact on the PNG LNG export to buyers during the Covid-19 period, a senior official says.
Kumul Petroleum Holdings Ltd (KPHL) managing director Wapu Sonk said ExxonMobil PNG Ltd had maintained operations for the project well during the period.
“The operations of PNG LNG project has not been impacted as much by the Covid-19,” Sonk said.
“ExxonMobil has done a good job at maintaining operations and there has been no impact on LNG export.”
KPHL is the country’s national oil and gas company and is responsible for managing the State’s 16.57 per cent equity in the ExxonMobil operated US$19 billion (K64.91 billion) PNG LNG project – becoming the third largest partner in the largest single investment made by the country to date.
A spokesperson from ExxonMobil said yesterday: “EMPNG continues to meet all contractual obligations, with export cargoes averaging 9 per month for 2020.”
Meanwhile, Sonk noted the decline in oil and LNG prices which could impact the expected revenue for the country from the project.
“The only impact that affects the revenue is the price of oil and LNG which have been, and continue to be very low due to the Covid-19 and the market conditions,” he said.
Sonk also confirmed that the price of oil was now at US$43/bbl (K146.91/ barrel) and LNG price on spot market was around US$2.30/MMbtu (K7.85/ million British thermal units).
Second largest partner in the project, Oil Search, which owns up to 29 per cent of the project, in its second quarter report for this year said: “Total revenue generated from hydrocarbons declined 27 per cent to US$258 million (K881.49 million), reflecting the material fall in oil prices and a higher proportion of LNG sold on the spot market.”
However, according to a report last Friday by Bloomberg, the price of oil was expected to remain the same for a while.
“If oil-producing countries do not continue the co-ordinated cuts, oil prices could again fall below US$40 (K139),” Jun Inoue, an economist at Mizuho Research Institute in Tokyo, said.
“Although demand is expected to continue to recover and inventories are expected to decline, the pace of recovery in oil prices is expected to be moderate.