(EnergyAsia, October 29 2010, Friday) — InterOil Corporation said its partly-owned subsidiary, Liquid Nuigini Gas Ltd, has signed an agreement with Hong Kong-based Energy World Corporation Ltd (EWC) to build a two-million-tonne-per-year (mt/y) land-based liquefied natural gas LNG plant in the Gulf province of Papua New Guinea.

Liquid Nuigini Gas, which is jointly owned by Pacific LNG, expects to start up the plant’s Train 1 by 2013 to process 1.5 trillion cubic feet (tcf) of natural gas over 15 years. The initial capital expenditure is expected to amount to US$455 per metric tonne of LNG production.

Interoil said EWC is entitled to a fee of 14.5% of the proceeds from the sale of the LNG. The agreement provides for a potential expansion of the plant’s capacity from two mt/y to three mt/y.

The project will include the construction of a jetty and breakwater for the LNG loading facility as well as an 80km-pipeline linking the Elk and Antelope gas fields to the coast.

InterOil said the project opens up the opportunity for a condensate stripping plant (CSP) being pursued in a joint venture with Japan’s Mitsui that will accelerate the monetisation of the Elk and Antelope reserves.