(EnergyAsia, April 30 2014, Wednesday) — Breaking ranks with an industry notorious for start-up delays, Exxon Mobil Corp said it will begin production at its US$19 billion liquefied natural gas (LNG) in Papua New Guinea ahead of schedule.
The plant’s first train is expected to begin production in “the coming weeks” with the first cargo to be shipped to Asia before midyear, while the second train is on course start up “in the next several weeks.”
Operated by the US major’s affiliate, ExxonMobil PNG Limited, the plant is expected to produce more than nine trillion cubic feet of gas over an estimated 30 years of operations. Its partners include Oil Search Ltd., National Petroleum Company of PNG, Santos Ltd, JX Nippon Oil & Gas Exploration Corp, Mineral Resources Development Company (representing landowners) and Petromin PNG Holdings Limited.
The project is an integrated development that includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of Papua New Guinea. Approximately 435 miles of pipeline connect the facilities, which include a gas conditioning plant and liquefaction and storage facilities with capacity of 6.9 million tonnes of LNG per year.
“The PNG LNG project exemplifies ExxonMobil’s leadership in project execution, advanced technologies and marketing capabilities,” said Neil W. Duffin, president of ExxonMobil Development Company. “Project revenue and profitability are underpinned by long-term LNG sales contracts covering more than 95% of the plant’s capacity.”
Flooding, minimal pre-existing infrastructure and extremely steep slopes were among obstacles that were overcome in constructing the project. Pipe had to be airlifted in some areas because the soil could not support heavy machinery and lack of infrastructure required construction of supplemental roads, communication lines and a new airfield.
“The project is optimally located to serve growing Asia markets where LNG demand is expected to rise by approximately 165% between 2010 and 2025, to 370 million tonnes per year,” said Mr Duffin.
ExxonMobil is still assessing opportunities to expand and develop its gas operations in Papua New Guinea.
In a separate statement, Santos said PNG LNG produced its first condensate cargo in late March.
“Delivery of the PNG LNG project is a key step in Santos’ strategy to become a major LNG supplier to Asia. PNG LNG will quadruple Santos’ LNG production once the project reaches full output,” said managing director David Knox.