Significant interest from LNG buyers: OSL

Oil Search Limited says significant interest has been shown by LNG customers, and formal negotiations are expected to commence early in 2019.

Managing Director Peter Botten said this in the company’s 2018 third quarter report.

He said Oil Search’s equity marketing team continued to engage with LNG buyers in key Asian markets, especially on the net phase in the PNG development.

The company had announced in the quarter two mid-term LNG sale and purchase agreements signed between Oil Search and two major companies.

“The PNG LNG Project entered into two mid-term LNG sale and purchase agreements (SPAs) with PetroChina and BP during the quarter, broadening the customer base for LNG from PNG and increasing total contracted volumes to approximately 7.5 MTPA,” stated Botten.

“Under the PetroChina SPA, the project will supply 0.45 MTPA of LNG for three years, while the BP SPA involves the supply of approximately 0.45 MTPA of LNG for three years and approximately 0.9 MTPA for two years thereafter. Sales under the PetroChina and BP SPAs commenced in July and August, respectively.

“These SPAs are in addition to the 6.6 MTPA already committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC.

“ExxonMobil, on behalf of the PNG LNG Project participants, is negotiating the sale of the final mid-term tranche of 0.45 MTPA, which is expected to be completed in the near term.”

Oil Search Limited has recorded its strongest quarter since the fourth quarter of 2014, delivering its highest quarterly revenue of $474.9 million (K1.5 billion).

The record is a result of increased production, higher LNG, gas and liquids sales and higher realized LNG and gas prices.

Cedric Patjole