"We declare our first goal to be for every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others".

- Papua New Guinea National Goals and Directive Principles

Thursday, 30 August 2012

Gulf LNG slips to 2017

FURTHER confirmation of an east Asian consortium’s interest     in operating the InterOil-led Gulf LNG project in Papua New Guinea has come from Korean media. First exports are reportedly targeting the end of 2017 – far off InterOil’s 2014 target from last year.

The Korea Economic Daily reported that Korea Gas Corporation, better known as Kogas, aims to bid for the operating stake as part of a consortium with Japan Petroleum Exploration and InterOil’s Japanese condensate stripping plant partner Mitsui.

“Kogas has formed a consortium jointly with Mitsui and JAPEX to participate in Papua New Guinea's $US5.4 billion InterOil LNG project,” a Korean government official reportedly said.

“Currently the Papua New Guinean government is working on selecting development partners and detailed terms of the deal, with the production time set at the end of 2017."

The combined bidding interest was flagged by Prime Minister Peter O’Neill months ago, with local media reporting it as the Far East Consortium while investors have since coined it “JKM”.

InterOil chief executive officer Phil Mulacek confirmed and commented on the bidder to PNGIndustryNews.net back in March.

“They are there and they are very interested,” he said.

“It’s a strong consortium – it represents the largest single buyer, Kogas in Korea and a lot of Japanese interest so it’s the two largest LNG markets joining together – I feel that’s a positive.”

Governor General Sir Michael Ogio revealed on Tuesday that the PNG government would establish a negotiating team which would work with the state-owned Gulf LNG partner Petromin to “ensure the best gas agreement” outcome.

PNGIndustryNews.net has not been able to find out much more at this stage, other than a Port Moresby-based source’s observation that of late some high-paid lawyers have been flown over from Sydney by the government.

While Royal Dutch Shell had talks with InterOil over the project, an industry source previously told PNGIndustryNews.net that Shell was not in an “ongoing discussion” with InterOil.

More recently, a Shell media spokesperson spoke of the PNG government’s view and stressed how the oil major considered any potential project investment among other opportunities.

“The government of PNG has identified Shell as the preferred partner with the government energy company Petromin for the potential development of future LNG projects because of Shell’s capability and PNG’s desire to bring such capacity into the country,” she told PNGIndustryNews.net this week.

“As a result of our discussions with both the PNG government and Petromin we have looked at a number of potential opportunities in PNG, including the InterOil project.

“We have had discussions from time to time with InterOil about their assets. Any future Shell participation in InterOil’s assets would require the opportunity to meet specific investment criteria and compete with other LNG options.”

InterOil first launched its formal process to find a government-acceptable, world recognised LNG operator for the project back in October, on the back of criticism from Petroleum and Energy Minister William Duma.

The time lost on this hunt has hit project timelines.

The Korean media report’s “end of 2017” date for first exports follows Mulacek’s comments from a recent conference call when he said it would be late 2015 or early 2016, “depending on the partner”.

As of last year, the Gulf LNG project was targeting 5 million tonnes per annum in 2014, with 3Mtpa from an Energy World Corporation-designed onshore modular LNG plant in Gulf province and the rest from a floating LNG facility.

There is also a proposed ramp-up aiming to hit up to 8Mtpa from the total project through 2015 and 2016.

In 2009, the project was based on a 7.6-10.6Mtpa LNG plant near Port Moresby, back when it was known as the Liquid Niugini Gas project.

While he is against a phased development approach, Duma has indicated he is comfortable with the LNG plant being based in Gulf province, which is home to InterOil’s Elk-Antelope discoveries that underpin the project.

"LNG WATCHDog reliase that most of Papua New Guineans don't know such deal and agreement with foreign government and developers on the LNG projects in Papua New Guinea. PNG Gonernment should publish the deals on the media for the citizen's comments."

Wednesday, 29 August 2012

PNG Government Suspends Notice

Information contained on this page is provided by companies via press release distributed through PR Newswire, an independent third-party content provider. PR Newswire, WorldNow and this Station make no warranties or representations in connection therewith.

SOURCE InterOil Corporation
PORT MORESBY, Papua New Guinea and HOUSTON, Aug. 29, 2012 /PRNewswire/ -- InterOil Corporation (NYSE:IOC) (POMSoX:IOC) is pleased to announce that it has received confirmation that the Independent State of Papua New Guinea has suspended the May 14, 2012 notice of intention to cancel the LNG Project Agreement between Liquid Niugini Gas Limited and the Independent State of Papua New Guinea. This suspension was previously announced by the Minister of Petroleum and Energy, the Honourable William Duma. The notice triggered a six month consultation period during which the parties were to explore steps to deal with or remedy the State's concerns.
Since the notice was received, InterOil has had constructive meetings with a number of PNG State departments, including the Department of Petroleum and Energy, the Department of Treasury and the Department of Justice. The Government has reached the stage where it has agreed on a basis for suspension of the notice.  Negotiations between the Government and InterOil will continue with a view to finalizing detailed specifications of the proposed LNG Project satisfactory to the State. The suspension of the notice will remain in place until the National Executive Council has approved the final concept of the LNG project.
InterOil is very appreciative of the cooperation and assistance it has received from Minister Duma and his department in reaching this important stage, and looks forward to working with them to bring this project to fruition for the mutual benefit of Papua New Guinea, InterOil, its shareholders and partners.

About InterOil
InterOil Corporation is developing a vertically integrated energy business whose primary focus is Papua New Guinea and the surrounding region.  InterOil's assets consist of petroleum licenses covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea.  In addition, InterOil is a shareholder in a joint venture established to construct an LNG plant in Papua New Guinea.

Tuesday, 28 August 2012

Pipelines in the mighty jungle

Characterised by dense forest, a prevalence of wild animals and difficult hydrological conditions, jungle terrain is by no means an easy feat when it comes to constructing pipelines. Construction contractor Punj Lloyd and PNG LNG Project operator ExxonMobil discuss steps that can be taken to ensure a successful pipeline project in the jungle.

Punj Lloyd has constructed several projects in India that traverse difficult jungle terrain. These include the 303 km East West Pipeline, the approximately 1,000 km Dabhol to Bangalore Pipeline and the 25 km pipeline from Mangalore to Bangalore, which traversed through difficult jungle terrain.
“The Bhivpuri Ghat section of the East West Pipeline, located in the State of Maharashtra, India, consists of jungle terrain. This pipeline was laid in the dense forests in 2009 at a steep slope ranging from 45–80°,” says the Punj Lloyd Pipeline Team.
“Pipelay for the Dabhol to Bangalore Pipeline was through the forests of the Western Ghats in Maharashtra. The Mangalore to Bangalore Pipeline was also laid in the dense forests of Karnataka, which contained vulnerable species.”
In its experience with jungle terrain, the Punj Lloyd Pipeline Team faces a great challenge in preserving as many trees as possible, which can result in a severely restricted right-of-way (RoW) and a difficult construction spread. Other challenges include climatic challenges, such as heavy rains, the presence of wild animals in forested areas, and the general protection of rare flora and fauna.

Sunday, 26 August 2012

Shell In Talks With InterOil On Papua New Guinea LNG

By Alexis Flynn; 24th August, 2012

LONDON--Royal Dutch Shell PLC (RDSB.LN) is in talks with liquefied natural gas producer InterOil Corp. (IOC) that could lead to the Anglo-Dutch energy giant buying into the U.S. firm's Papua New Guinea exploration license areas, Shell's two most senior executives said Thursday, although neither was prepared to be drawn on where discussions may lead.
"We have been in talks with InterOil and other interested parties, but we can't say where [they are] going," said Chief Financial Officer Simon Henry.
Papua New Guinea-focused InterOil holds three prospecting licenses onshore the south-east Asian island nation, where early appraisal drilling has revealed vast natural gas reservoirs are located.
The firm also plans to build a 9 million metric ton a year LNG terminal in Papua New Guinea but will need partners to help cover some of the estimated $6 billion required to build a two-train processing plant.
It is currently soliciting interest in the sale of a 25% stake in the LNG project.
Shell Chief Executive Peter Voser skirted a question on whether Shell was preparing a takeover bid for the Houston, Texas-based firm. Shell recently pulled out of a bidding war for Mozambique-focused prospector Cove Energy PLC (COV), citing the high cost of the acquistion relative to other growth opportunities within its existing business.
"It's an interesting play there," said Mr. Voser. "We have talked to the government, we are looking at it," said Mr. Voser, adding that any decision on investing in Papua New Guinea would have to be framed against its wider portfolio.
"At the end, it will be profitability driven. It will be: Can we do a project in a safe and reliable way, and will it deliver the performance? I think to answer that question, it is too early for that," said Mr. Voser.
InterOil wasn't immediately available for comment.
-Write to Alexis Flynn, alexis.flynn@dowjones.com
Corrections & Amplifications
This article was corrected at 13:40 GMT to clarify that InterOil's license areas were onshore not offshore.
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Sunday, 19 August 2012

Large Order for GDU-Incus Ultrasonic Gas Detectors for Papua New Guinea LNG

Google Alert; 15 August, 2012

Hazard detection specialist Groveley Detection (UK) has shipped 31 of its GDU-Incus ultrasonic gas leak detectors to the new upstream LNG plant in Papua New Guinea – in Groveley’s largest Incus consignment to date.The units – supplied against two orders to a total contract value of $350,000 – will monitor potential gas leaks in the LNG plant gas compression areas and other areas with pressurised gas.

Ultrasonic gas detectors instantly detect gas leaks by 'hearing' the sound generated by escaping gas and is the only method able to detect gas without the gas cloud needing to come into direct contact with the detector. The technology is impervious to wind, fog or gas dilution and is therefore very reliable in outdoor installations.
The GDU-Incus incorporates four independent sensing heads to allow unobstructed sensing and a larger detection range.
The Papua New Guinea liquefied natural gas (PNG LNG) project is a new gas project built to handle three large gas discoveries in the southern and western highlands of the country. It includes gas production, processing and liquefaction facilities, as well as offshore and onshore pipelines.

LNG cargoes are due to start in 2014. The PNG LNG project has an estimated lifespan of around 30 years, by which time it could produce around nine trillion cubic feet of gas.

(LNG WatchDog fears that most of the contracts in the PNG LNG Project areas were given to the overseas contractors. The PNG Government is currently crippled with both funds and knowledge to secure such contracts to fellow Papua New Guinean. Watchdog dislike foreign contractors award contracts on his soil which creates that we are spectators on our own soil.)