(Adds trader comment)
SINGAPORE, April 1 Oil liquids from ExxonMobil's
gas export project in Papua New Guinea will be blended
into the country's only crude blend, the company said Wednesday,
almost doubling crude exports by the middle of the year.
ExxonMobil's $19 billion PNG LNG Project is due to begin
exports of 6.9 million tonnes of liquefied natural gas (LNG) per
year around mid-2014.
Along with LNG, the project will produce about 25,000
barrels per day (bpd) of condensate, a low-density mixture of
hydrocarbon liquids that will be blended into Papua New Guinea's
existing export stream, the Kutubu Blend, a spokeswoman for the
The additional volumes will result in an almost doubling in
production of the Kutubu Blend, Papua New Guinea's only export
grade made up of the Kutubu, Gobe, Moran and SE Mananda crude
streams. Production of the blend currently stands at around
30,000 bpd, an industry source said.
Kutubu is normally sold in cargoes of 650,000 barrels with
1-2 cargoes per month exported to regional refiners. Exports
will rise to 2-3 monthly cargoes by the middle of the year. The
first cargo of the new blended Kutubu crude will be marketed by
project partner Oil Search Ltd, the spokeswoman said.
As a result of condensate in the mix, the new Kutubu Blend
will become lighter with an API of around 49 compared to 44-45
now, an industry source said.
A trader said the quality changes would not be significant,
however the rise in number of monthly cargoes could make the
blend more attractive to regional refiners seeking steady supply
of light sweet crude.
The higher crude exports from impoverished Papua New Guinea
come amid stagnating crude production in a region that is
increasingly dependent on crude imports.
Asian refiners import more than twice the volume of crude
produced regionally, and Asia is estimated to need an additional
300,000 bpd of low-sulphur or sweet crudes in 2014 compared with
A total of 200 million barrels of associated liquids are
expected to be produced over the LNG project's 30 year life, Oil
Search Ltd said on its website.
Other shareholders in the PNG LNG Project include
Australia's Santos Ltd. and Japan's JX Nippon Oil &
(Reporting By Jacob Gronholt-Pedersen; Editing by Ed Davies and