Kumul Petroleum Holdings Limited (KPHL) has welcomed the announcement of the Full Front End Engineering and Design (FEED) phase of the Papua LNG Project.
KPHL managing director, Wapu Sonk when applauding the announcement on March 6, 2023 said the development paves the way for an additional LNG train to be owned by KPHL, unlocking previously inaccessible gas reserves and creating significant value for Papua New Guinea.
He said: “Papua LNG is the country's next large-scale LNG development and will bring many short and long-term benefits to the nation. Kumul Petroleum is ready to take up the State's 22.5% share in the project after FID.”
Apart from generating additional government revenue and providing a short-term economic boost during project construction, the brownfield expansion of the Caution Bay LNG site includes provisions for extra LNG trains, allowing for future expansion of processing facilities.
Mr Sonk explained that the plant design for the initial four electric-powered 1 mtpa trains for Papua LNG also allowed for the later installation of additional trains. This means that as further commercial gas reserves were identified, they could be processed at the Caution Bay site.
Kumul Petroleum has approximately 2.5 tcf of gas resources in the Kimu, Barikewa, Uramu, and Pandora fields in licenses where it is the Operator. The company intends to aggregate this gas to feed into its own KPHL 1mtpa train at Caution Bay, subject to engineering and commercial discussions among joint venture parties, government approvals, and market conditions, including international LNG prices, between now and 2030.
Mr Sonk noted that with the existing two PNG LNG trains and the proposed four Papua LNG trains, the additional train proposed by Kumul Petroleum would be the seventh at the Caution Bay site, with the potential to unlock significant value for the country.
KPHL will work with the operators of the PNG and Papua LNG projects to study the tie-in of a new pipeline to the PNG LNG and Papua LNG pipelines, as well as the coordinated operation and maintenance of the additional Kumul LNG train at Caution Bay.
All parties have signed the framework agreement underpinning the potential 7th train, confirming their support for Kumul Petroleum.
He added: “Commercialization of additional gas is an opportunity totally in the national interest. It means we can develop these gas discoveries, which, to date, have been stranded, to earn export income from a nationally owned LNG train while assisting in the development of a domestic gas market in PNG.”