Oil Search is confident the PNG LNG and Papua LNG projects will help the current commodity crises experienced in the country and other markets.
In its first quarter report, managing director Peter Botten said given the current environment of low oil and gas prices, Oil Search believes that cooperation between, and possibly an integration of, these two potential developments is essential to maximise value and avoid high-cost infrastructure duplication in PNG.
He said based on their studies, there are a wide range of development activities which, if pursued in a coordinated and cooperative manner, could generate material value with benefits not just from lower costs but also from ongoing operational synergies and potential schedule acceleration.
“The PNG Government, which will have equity in both PNG LNG expansion and Papua LNG, would also benefit significantly from generating maximum shared value during this next phase of LNG development in PNG.
“With an estimated gross undeveloped 2C contingent gas resource base of approximately 10 tcf (gross) across both projects, Oil Search believes there is already sufficient resource to deliver two 4 MTPA LNG trains, with the option of a third expansion train,” Botten stated.
“In February, the PNG Government’s loan, originally undertaken with UBS to fund its purchase of a 9.8 percent stake in Oil Search in 2014, was refinanced with UBS, with the support of JP Morgan.
“This confirms the Government’s commitment to maintaining its long-term shareholding in Oil Search, which it has held since 2002, and its continued confidence in the Company’s future growth potential.”