(EnergyAsia, November 28 2011, Monday) — Liquid Niugini Gas Ltd, a company jointly owned by InterOil Corp and Pacific LNG Operations Ltd, has signed a heads of agreement (HOA) to supply Gunvor Singapore Pte Ltd one million tonnes of liquefied natural gas (LNG) a year for 15 years from 2015.
The LNG will be sourced from the Elk and Antelope gas fields in Papua New Guinea, said InterOil at last week’s signing ceremony in Port Moresby witnessed by Prime Minister Peter O’Neill, the region’s Gulf Governor Havila Kavo, and the country’s cabinet Ministers.
Liquid Niugini Gas Ltd is developing liquefaction and associated facilities in the country’s Gulf Province with contractors FLEX LNG and South Korea’s engineering giant Samsung.
While the agreement is not binding, NYSE-listed InterOil said it provides the basis to negotiate and document terms for the eventual execution of a binding sales and purchase agreement (SPA) with the Russian company’s Singapore office by the second quarter of 2012.
InterOil CEO Phil Mulacek said:
“InterOil is proud to work with Gunvor, one of the largest energy commodity movers in the world. With 2.3 million tonnes/year now committed under HOAs, InterOil has preliminary LNG off-take arrangements for more than 50% of its start-up LNG volumes. We expect the HOAs to facilitate remaining infrastructure financing arrangements with binding SPA, driving robust debt coverage for the Gulf LNG project.”
Liquid Niugini Gas Vice President Conrad Kerr said: “Gunvor has become an established player in the LNG industry through its success in acquiring, and moving large amounts of short-term LNG cargoes in the last few years. We are interested in value optimisation for our LNG, and a long-term relationship with Gunvor enhances this strategy.”
InterOil Corporation is developing a vertically integrated energy business with primary focus on Papua New Guinea and the surrounding region.
The company’s assets consist of petroleum licences covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities in Papua New Guinea.
Through its global offices in Geneva, Singapore and Nassau, Bahamas Gunvor Group is the world’s third largest independent oil trading company by turnover. The company also trades a broad range of other energy commodities including coal, gas, LNG, and emissions.
Pacific LNG is an affiliate of Clarion Finanz AG, a private company specialised in energy and mining investments. Pacific LNG owns an economic interest of approximately 20% in the Elk Antelope fields, 47.5 % of Liquid Niugini Gas and is a large shareholder of InterOil.