March 5, 2018 / 9:32 AM / 13 days ago

Five facts on Exxon's remote Papua New Guinea gas project

SINGAPORE (Reuters) - ExxonMobil is assessing the damage to its Papua New Guinea natural gas export project after a strong earthquake forced the company to suspend production.

The ExxonMobil Hides Gas Conditioning Plant process area is seen in Papua New Guinea in this handout photo dated March 1, 2018. ExxonMobil/Handout via REUTERS

Here are five facts about one of the world’s most remote and challenging liquefied natural gas (LNG) and condensate production and export facilities.


The Papua New Guinea LNG (PNG LNG) project opened in 2014 in the South Pacific country, one of Asia’s poorest and most politically troubled despite its resource wealth.

The main processing facility, the Hides Gas Conditioning Plant, sits in the rugged highlands of Hela Province and handles up to 1 billion cubic feet of gas daily from eight wells.

The site’s remote location required chartering huge Russian Antonov cargo planes to deliver equipment to a jungle airfield at Komo, the longest airstrip in Papua New Guinea.

Hides is linked by a 700-km (435 miles) pipeline snaking through the jungle to the LNG plant and export terminal near the capital city Port Moresby.

(GRAPHIC: Papua New Guinea quake IMG,


A powerful 7.5 magnitude earthquake struck near the Hides facility on Feb. 25, killing dozens of people and knocking out production. The quake damaged power infrastructure and the Komo airfield.

Before it can restart the facility, Exxon will inspect the pipeline and check the gas field for structural damage.

The ExxonMobil Hides Gas Conditioning Plant process area is seen in Papua New Guinea in this handout photo dated March 1, 2018. ExxonMobil/Handout via REUTERS

The export facility near Port Moresby, where the gas is liquefied for shipment on tankers, was not damaged, Exxon has said.


Exxon’s main partners in the project are currently Australia’s Oil Search and Santos.

In 2012, Exxon blamed unfavorable foreign exchange rates and delays caused by disgruntled workers and landowners for a $3.3 billion spike in costs, raising the price tag to $19 billion.

However, Exxon stunned markets when it completed the project in 2014, ahead of schedule and producing at up to 25 percent above its annual 6.9 million tonnes nameplate capacity.


Not all has gone smoothly for Exxon in Papua New Guinea.

In November 2017, the company evacuated some staff and suspended “non-essential work” due to unrest in Hela Province. The violence was linked to national elections and disputes over royalties from the PNG LNG project.

In 2012, a landslide near a quarry used by Exxon killed at least 25 people and raised questions about the safety of excavations. Exxon said it had closed the quarry five months before the landslide.


Only days before the Feb. 25 quake, Exxon said it had agreed to plans with French energy major Total to double capacity at PNG LNG at an estimated cost of $13 billion.

It was not clear if the quake had affected those plans.

Reporting by Henning Gloystein; Editing by Darren Schuettler and Christian Schmollinger

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