InterOil Gulf LNG project draws criticism from PNG govt

PERTH, Sept 27 Tue Sep 27, 2011 6:39am EDT

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PERTH, Sept 27 (Reuters) - The Papua New Guinea government is calling for Interoil to revise plans for its $6 billion liquefied natural gas project in the country's Gulf province, on the grounds that the project is not what it originally approved.

The Papua New Guinea government had approved an LNG project with a production of 7.6 to 10.6 million tonnes per annum (mtpa).

Papua New Guinea's Minister for Petroleum and Energy, William Duma, said in a statement dated Monday that InterOil was "publically promoting, communicating and presenting a different project without seeking the state's prior approval."

According to InterOil's project website, the Gulf LNG project will have a capacity starting at 2 mtpa, expandable to 8 mtpa, as well as a floating LNG capacity of up to 2 mtpa. The company's website says the project is expected to produce first gas by 2014/2015.

Interoil is developing the project with Pacific LNG in a joint venture called Liquid Niguini Gas Limited (LNGL).

"The PNG government supports, and will continue to support, LNGL/InterOil in delivering the project contemplated in the agreement, but not a project which deviates from the agreement," Duma said.

Duma said the developers of the Gulf LNG project are promoting a "fragmented" project and said none of the companies currently involved has the experience necessary to operate a "world class" LNG project.

InterOil could not immediately be reached for comment. (Reporting by Rebekah Kebede; Editing by Michael Urquhart)

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