(Adds comment, details)
BEIJING, April 22 First shipments from a new
liquefied natural gas (LNG) project in Papua New Guinea operated
by French oil major Total SA is expected in 2021, a
top executive at a partner in the project told Reuters on
Total and its partners InterOil and Oil Search
plan to begin marketing a total of 6.8 million tonnes
of LNG per year from the project mainly to buyers in China and
Japan by the end of this year, said Keli Taureka, executive vice
president of InterOil, in an interview.
The project will become the Southeast Asian country's
second, after Exxon Mobil Corp in May last year began
exports from its $19 billion PNG LNG project.
The new project, drawing gas from Papua New Guinea's biggest
undeveloped gas deposit, the Elk and Antelope fields, hopes to
take advantage of many LNG contracts expiring in North Asia
around that time, Taureka said, adding he expected Chinese
demand to double.
The project "would be taking advantage of contract expiring
in North Asia, a rebound in energy prices...and China will be
doubling in demand," Taureka said.
However, the project may face competition from LNG from
North America and Australia, where projects will ramp up towards
the end of the decade.
Asian LNG prices have more than halved since last year in
tandem with lower oil prices and as demand growth fails to keep
up with new supply.
Preliminary estimates show the Elk and Antelope fields hold
5-9 trillion cubic feet of natural gas, although reserves will
only be confirmed once an appraisal study is complete by the
middle of this year, Taureka said.
Total bought a 40.1 percent stake in the project from
InterOil in April last year for $429 million. The sale was
disputed by Oil Search, which claimed it had the right to buy
the stake, but lost the case in international arbitration.
Total has made few comments on the project, but said on its
website that Papua New Guinea holds the right to acquire a 22.5
percent stake in the project once a final investment decision
has been made, which would lower Total's stake to 31.1 percent.
InterOil has a 36.5 percent stake in the project, while Oil
Search holds about 23 percent.
(Reporting by Aizhu Chen; and Jacob Gronholt-Pedersen; Editing
by Gopakumar Warrier)