CHIBA, Japan (Reuters) - Exxon Mobil Corp is marketing 1.3 million tonnes per year (mtpa) of mid-term liquefied natural gas volumes from its $19 billion Papua New Guinea LNG (PNG LNG) plant, reflecting overproduction and an increase in gas reserves.
The two-train plant with an original nameplate capacity of 6.9 million tonnes a year produced 7.9 million tonnes last year, making it possible to offer the excess for sale, Stephen McCusker, Vice President of PNG Marketing at ExxonMobil Asia Pacific Pte Ltd told Reuters at a gas conference in Japan.
The move is also possible as ExxonMobil PNG, operator of the PNG LNG joint venture, said in February that a study showed that the likely technically recoverable natural gas from all PNG LNG fields is 11.5 trillion cubic feet (tcf), up a quarter from an earlier assessment of 9.2 tcf.
“Originally we contracted for the base project 6.6 mtpa, and last year we produced close to 7.9 mtpa, so the 1.3 mtpa plus the additional recertification gives us an opportunity to approach the market with the mid-term contracts,” McCusker told Reuters on Thursday at the Gastech conference in Chiba.
PNG LNG’s main four long-term customers are top global LNG buyer JERA Co at 1.8 million tonnes a year, Osaka Gas at 1.5 million, Taiwan’s CPC with 1.2 million, and China’s Sinopec at 2 million tonnes a year.
The PNG project sells the remainder as spot and short-term supplies to those four and other customers, Exxon Mobil said.
The U.S. oil and gas major and its joint venture partners are also looking at some upcoming opportunities, McCusker said.
“Other fields that we’ve already discovered within the project, and of course, the other projects that are occurring around us - obviously the Total project - so PNG LNG is looking at those opportunities,” he said.
Exxon Mobil and Total SA, vying to develop new gas fields in Papua New Guinea to tap into an expected market recovery in the next decade, are likely to face tougher terms than Exxon Mobil’s PNG LNG project.
Prime Minister O‘Neill has said the government had been generous when negotiating Exxon Mobil’s PNG LNG project in 2009, as it was looking to secure the country’s biggest foreign investment despite the global financial crisis.
Reporting by Osamu Tsukimori; Editing by Tom Hogue