April 9, 2019 / 2:29 AM / 4 months ago

CORRECTED-UPDATE 1-Oil Search, Total, Exxon sign long-awaited gas deal with PNG

(Corrects paragraph 6 to show third new LNG train being planned by Exxon Mobil, not by Total-led project)

* Deal allows initial work to kick off on project -Oil Search

* Final Investment Decision expected in 2020 -Oil Search

* Overall expansion of PNG’s LNG output expected to cost $13 bln

April 9 (Reuters) - Australia’s Oil Search, France’s Total SA and Exxon Mobil on Tuesday signed a deal with Papua New Guinea that will allow work to start on a long-awaited project which could help double the nation’s liquefied natural gas exports.

Oil Search said in a statement that the agreement would allow the parties to start activities related to so-called Front End Engineering and Design (FEED) such as contractor selection for Papua LNG - a project led by Total, with Exxon and Oil Search as minority partners.

“FEED is expected to result in a Final Investment Decision in 2020, which will ensure that first production from ... LNG trains is available in 2024,” said Oil Search’s managing director, Peter Botten.

Oil Search had initially hoped the project, to fuel an expansion of Exxon Mobil’s PNG LNG plant, would be approved in 2018, but talks with the government took longer than expected after an earthquake hit the country.

The project intends to develop the Elk and Antelope gas fields to feed two new processing units, or trains, to be built at the PNG LNG plant run by Exxon Mobil.

Exxon Mobil is also looking to sign-off on the development of a third new train to be supplied from its existing PNG LNG fields and the new P’nyang field.

All together, the developments are expected to double the PNG LNG plant’s output to around 16 million tonnes a year, with analysts estimating the overall expansion will cost around $13 billion.

Shares of Oil Search and sector peers such as Santos were over 2 percent higher against a slightly lower benchmark index. (Reporting by Devika Syamnath in Bengaluru; Editing by Joseph Radford)

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