InterOil announcement on Elk Antelope LNG project ‘very, very close’


InterOil expects to announce a ‘major transformational deal’ by the end of 2013 to develop the Papua New Guinea’s second LNG project, according to recently-appointed CEO Michael Hession.

InterOil’s Rig at Antelope-2

InterOil’s Rig at Antelope-2

InterOil was awarded a licence to develop the Elk and Antelope fields in the Gulf Province fields in November 2010.

The license covers nine blocks surrounding the fields, including Wahoo, about 170 kilometres from Port Moresby.

At an analysts’ briefing on Wednesday, Dr Hession announced he had secured a US $250 million loan facility from a consortium of banks led by Credit Suisse, including ANZ, BSP, Westpac and CBA.

We have offers from six or seven ‘mega majors’ to develop the fields, he said, adding talks were underway in Singapore and that ‘we are very, very close indeed’.

Hession described the project as the ‘biggest gas field in the Southeast Asian for 20 years’.

He said the PNG Government ‘knows how close we are and they’ve been extremely supportive’.

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Hession said, since taking charge as CEO four months ago, he had ‘cleared the decks’ of other deals and projects and streamlined the business, saving US$ 30 million.

He said significant new drilling and exploration was underway, with drilling to commence shortly at the Wahoo site, which he described as a ‘multi TCF gas resource’. Other potential multi TCF sites include Raptor and Bobcat, which sit between existing discoveries.

Earlier this year, InterOil said it was still discussing whether gas from the Elk and Antelope fields would support an expansion of the country’s first PNG LNG project (due to start producing in the second half of 2014) or to build its own gas-export facility.

InterOil has also announced it suffered a net loss of US$6.3 million (K15.25 million) for the third quarter this year as against a net profit of US$5.3 million (K12.8 million) for the same period last year.