Papua New Guinea, Exxon to start talks on revising P'Nyang gas deal

FILE PHOTO: A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes/File Photo

(Reuters) - Papua New Guinea is set to start talks with Exxon Mobil Corp to try to negotiate better terms from the P’Nyang Gas Project, Minister for Petroleum Kerenga Kua said on Friday, with an agreement expected by the end of the month if all goes well.

The push to extract more benefits from the P’Nyang project is part of a wider effort by PNG’s new government to reap more rewards from the country’s mineral and petroleum resources to lift the country out of poverty.

“All things going well we can expect to sign a P’Nyang Gas agreement around the end of this month,” Kua said.

The P’Nyang project will help feed an expansion of Exxon’s PNG LNG (liquefied natural gas) plant, in which Australia’s Oil Search and Santos Ltd are also stakeholders.

Talks over the project were put on hold earlier this year, when the government sought to revise a separate LNG agreement it has with French energy firm Total, in which Exxon is also involved. That deal was finally endorsed in early September, with minor concessions from Total.

Kua had earlier told Reuters the state would seek “far better” terms for P’Nyang than those with Total.

“We look forward to working with the Government of PNG to progress the required gas agreement for the P’nyang project ahead of potential decisions on FEED for the three train development at the existing LNG plant site,” Exxon said in a statement emailed to Reuters.

Reporting by Ambar Warrick in Bengaluru; Editing by Mark Potter and Daniel Wallis