- Oil Search (OSH), along with joint venture partners Total and ExxonMobil, has been given the green light to proceed with its liquefied natural gas (LNG) project in Papua New Guinea
- Two years ago, a Memorandum of Understanding signed, however, the project faced landowner issues and a change in government leadership
- Now, the PNG Government has signed a fiscal stability agreement
- The fiscal stability agreement is crucial for large investments to move forward with the project
- On market close, Oil Search is up 0.48 per cent and trading at $4.15 per share
Oil Search (OSH), along with joint venture partners Total and ExxonMobil, has been given the green light to proceed with its liquefied natural gas (LNG) project in Papua New Guinea.
In early 2019, a memorandum of understanding was signed to develop the asset, however, the project faced headwinds like landowner issues and a change in government leadership.
Two years on, the PNG Government has signed a fiscal stability
agreement with the operator of the project — French company, Total.
The fiscal stability agreement is crucial for large investments to move forward with the project.
Additionally, the three companies land over the Elk and Antelope gas fields to supply the LNZG plant was also extended in a separate deal.
Oil Search Managing Director, Dr Kerian Wulff is pleased to see further progress achieved on Papua LNG.
“This milestone highlights the commitment from the PNG Government towards Papua LNG and is a significant step in derisking the project. It also demonstrates
increasing alignment between the PNG Government and the joint venture partners,” he said.
“We look forward to progressing Papua LNG and announcing further milestones consistent with our Strategic Review announced in November 2020,” he added.
The Prime Minister of PNG, James Marape, says the deal demonstrates PNG’s commitment to the LNG project and gives comfort and encouragement to the developers.
He confirmed that the Paupa LNG project will proceed as a two-train project, notably, Oil Search will have a stake in each project.
“Papua LNG Project will build its two train LNG facility within existing PNG LNG’s facilities at Caution Bay in the Central Province, and will still be able to leverage multiple technical synergies,” James said.
” From an environmental perspective, a Papua LNG Project’s environmental footprint will be minimised by this integration. These are great outcomes for all stakeholders of the project but moreso the national government,” he added.
On market close, Oil Search is up 0.48 per cent and trading at $4.15 per share.