The partners behind the Papua liquified natural gas plant have begun fully integrated front-end engineering and design work, taking the project closer to completion.
The partners behind the Papua liquified natural gas plant have begun fully integrated front-end engineering and design work, taking the project closer to completion.
The Papua LNG project is a joint venture between operator TotalEnergies (40.1 per cent), ExxonMobil (37.1 per cent) and Santos (22.8 per cent) in Papua New Guinea.
In August 2022, Clough announced it had been selected - in consortium with Technip Energies- to perform the FEED work for the Papua LNG project.
The project was not tied up in Clough's negotiations with its buyer WeBuild, after the Perth engineering company collapsed in 2022.
Papua LNG's liquefaction capacity is expected to be up to 6 million tonnes of LNG per annum, with first production tipped for the end of 2027 or early 2028.
The joint venture partners have selected a concept using four electric LNG e-trains with a combined capacity of 4mtpa.
The project has also secured access to 2mt of existing liquefaction capacity from the existing facility, PNG LNG, which is operated by ExxonMobil on behalf of five co-venture partners.
“Integrating the Papua LNG midstream development within PNG LNG maximises the value of both projects and delivers increased capital efficiency by reducing upfront capital expenditure and maximising integration synergies,” Santos said in an announcement on the ASX.
“PNG LNG will receive an access fee, pro-rata opex sharing and ongoing processing toll revenue that compensates PNG LNG for making the capacity available.”
The partners aim to reduce the carbon intensity of the project by selecting e-trains and reinjecting reservoir CO2.
Santos chief executive Kevin Gallagher said Papura LNG FEED entry was consistent with the company’s strategy to backfill and sustain its core natural gas assets.
“The concept selected for Papua LNG maximises value through midstream integration with PNG LNG to deliver increased capital efficiency and lower operating costs, consistent with our disciplined operating model,” he said.
“FEED entry for Papua LNG is a significant step for the project and we are working closely with our partners, the PNG government, communities and local companies to deliver new jobs and help support the local economy.”
PNG could exercise a back-in right for up to 22.5 per cent interest at the final investment decision, which is expected by the end of 2023 or early 2024.
On the ASX, Santos shares were up 2.66 per cent to $7.33 at close of market.
