Cooperation will save energy partners billions

Cooperation and sharing of facilities between joint venture partners of the country’s two Liquefied Natural Gas (LNG) projects will save the State and developers between US$2 to US$3 billion dollars.

Speaking at the Inaugural PNG Petroleum and Energy Summit, Oil Search Managing Director, Peter Botten, says the joint venture partners should be looking at cost synergies and optimising spending through reduced wasteful duplication of infrastructure.

He said this will offer the best capital and operational expenditure savings.

“The cost benefits with opex and capex savings are substantial. We believe downstream capex savings can be somewhere between US$2 and US$3 billion, and ongoing operating cost savings can be as much as US$125 million per annum. (They) are not small numbers,” Botten states.

“There are percentual savings in various factors in various parts of the facilities, especially in plant site areas. All of that if you can get that cooperation, the capex and the opex down, makes us more competitive in an extremely challenging market.”

He adds: “We also maintain two operators in the country. We believe there is an ability through cooperation to maintain the Papua LNG, maintain PNG LNG and the operatorships of Total and Exxon in the process.

“Working together in key parts of the business does deliver value.”

Botten says PNG was at the cross roads of where it goes with LNG and its overall gas development.

He states over the next 18 months, critical decisions will have to be made about the next 20 years on how PNG’s gas development will take place.

“It is a critical time and absolutely at the crossroads of how we optimise this business, not just for developers and shareholders but for the State, the landowners and various entities within Papua New Guinea.

“There is no doubt that successful delivery of PNG LNG and the subsequent world class performance has put PNG on the world map for LNG development,” Botten furthers.

Cedric Patjole