PNG LNG ramps up to full export capacity

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Papua New Guinea has become the latest nation to join the still exclusive club of LNG producers, with its first liquefaction plant – PNG LNG – now said to be running at full capacity. Impressively, the $19 billion project managed to start up ahead of schedule, delivering its first cargo to Japan’s Tokyo Electric Power in May.

According to the International Group of LNG Importers (GIIGNL), at the end of 2013 there were 86 liquefactions trains in operation around the world in 17 exporting countries, with an aggregate capacity of 286 mtpa. PNG therefore becomes the 18th exporter, following in the footsteps of Angola, whose first project – a single 5.2 mtpa train – started up last year.

The 6.9 mtpa PNG LNG project will provide a long-term supply of LNG to four customers in Asia: China Petroleum and Chemical Corp. (Sinopec), Taiwan’s CPC Corp, and Japan’s Tokyo Electric Power and Osaka Gas. Long-term contracts have been signed for 6.5 mtpa of the project’s capacity, so the remaining production will be sold in the spot market.

Third train being considered: The integrated development includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of Papua New Guinea. A 700 kilometre pipeline transports gas to the liquefaction and storage facilities near Port Moresby. The two existing trains may be supplemented by a third if sufficient reserves of gas are proved up.

“This is the country’s largest resource project and it has taken the effort of many thousands of people to bring it to fruition,” said ExxonMobil PNG Limited Managing Director Peter Graham.

Papua New Guinea LNG project map

 

A 700 kilometre pipeline connects PNG LNG’s production facilities with the liquefaction and storage plant at Port Moresby. (Source: PNG LNG)

Production at the first train started in April, with production from the second train following as additional wells came online. Construction work began in 2010 and took more than 191 million work hours to complete. At peak, more than 21,000 people were employed, including around 9,000 Papua New Guineans.

Obstacles: Among the obstacles that had to be overcome during construction were flooding, minimal existing infrastructure and extremely steep slopes. Pipe had to be airlifted in some areas because the soil could not support heavy machinery and the lack of existing infrastructure required construction of roads, communication lines and a new airfield.

“This project has brought significant economic benefits to our country that will last for generations to come,” said Papua New Guinea’s Prime Minister, Peter O'Neill. “Not only will the people of Papua New Guinea now benefit; their children and grandchildren will continue to enjoy the benefits and positive effects from this valuable resource development.”

PNG LNG is operated by ExxonMobil PNG Limited in co-venture with Oil Search, PNG’s national oil and gas company, Santos, JX Nippon Oil & Gas Exploration Corporation, Mineral Resources Development Company, and Petromin PNG Holdings.