Papua New Guinea’s other gas project: Arran Energy’s Stanley


While the Papua LNG and P’nyang projects are the main game in Papua New Guinea’s gas sector, Arran Energy’s smaller Stanley gas project in Western Province looks set to beat both into production. Business Advantage PNG talks to Executive Chairman Michael McGowan to find out more.

The Stanley gas project site in Western Province. Credit: Arran Energy

While the Papua LNG and P’nyang gas projects are expected to more than double Papua New Guinea’s current gas production over the next decade, the country also has several smaller gas projects with potential.

One of these projects is just about ready to go.

A petroleum development licence (PDL10) for the Stanley gas field in the northern part of PNG’s Western Province was issued in 2014, but the project has mostly been on ice since, with previous developers Repsol and Horizon Oil finally divesting themselves of the project in 2020.

Enter Arran Energy, a company formed by former Oil Search executive and President of Eaglewood Energy, Michael McGowan.

‘We have inherited a rather unique situation. Stanley has gone through a number of cycles and hasn’t come to fruition for various reasons,’ he tells Business Advantage PNG.

‘While the big-ticket item will be the offshore construction of the project’s gas plant, he expects there to be plenty of local content on the project.’

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‘We have a small, experienced team. We’ve taken a simplified approach to the project. We know we can get it on stream.’

McGowan tells Business Advantage PNG that a final investment decision (FID) and financial closure on the project is now expected in August this year.

With Houston-based Azota Gas Processing pre-selected as the project’s engineering, procurement and construction (EPC) contractor, Stanley could be in production as early as January 2024. 

Condensate first

The location of the project in Western Province (click to enlarge). Credit: Arran Energy

The project will initially involve stripping liquid hydrocarbon condensate from the Stanley field using an on-site gas plant, and then re-injecting the majority of the project’s gas back into the ground, while using some of it for local power generation.

The condensate with then be trucked to the Fly River just below Kiunga, from where it will be shipped overseas.

‘Condensate is much more marketable,’ explains McGowan. ‘It sells like crude oil and its price is aligned with Brent Crude, whereas gas is more of a contract market and requires additional processes such as liquefaction.’

While oil prices are high currently, this hasn’t been the major motivation for moving towards FID. Oil prices, he observes, have shown themselves to be extremely volatile in recent years.

‘When we took this on, oil prices were quite low. Our task is to look at producing profitably with [per barrel] oil prices with a 4 in front of them. Right now, there’s a 10.’

He says simplifying the project has involved being less ambitious with production targets.

‘We’ve downsized the production from 140 million cubic feet per day, and 3900 barrels of condensate, to between 90 and 100 million cubic feet per day and condensate production of approximately 2500 barrels per day.’

The Arran team is also committed to working with stakeholders and local communities to utilise as much Stanley gas as possible to support lower cost and lower emissions electrification in the Western Province.

Stanley: the economic benefits

The direct benefits of the Stanley project will include valuable revenue streams for national and provincial governments and landowners through landowner equity participation, taxes, royalty payments, levies, and through State and Provincial Government equity participation in the project.

  • Direct capital investment (over 20-year life): K400 million
  • Recurrent operating expenditure (per annum): K40 million
  • Total operational expenditure (first 20 years): K814 million
  • Jobs (during construction): 75–100 full-time jobs plus 150–200 indirectly (c.90% for PNG citizens)
  • Jobs (once production commences): 25–30 positions
  • Estimated total cash flow to the PNG government and landowners (over 20-year life): K1.5 billion (inclusive of gas sales).

Source: Arran Energy

Local content

McGowan says it will require capital expenditure of about US$110 million (K387 million) to develop Stanley into a productive field.

While the big-ticket item will be the offshore construction of the project’s gas plant, he expects there to be plenty of local content on the project.

‘At least 25 per cent of that is going to be local spend in the construction phase,’ he says.

Expressions of interest have recently been sent to PNG-based companies for the civil engineering and earthworks, and for the onsite installation of the plant at the Stanley well site.


Arran Energy currently owns 90 per cent of the Stanley project, with state-owned Kumul Petroleum Holdings Ltd holding the other ten per cent.

After FID, it’s anticipated Kumul Petroleum will increase its stake in the project on terms more favourable than those mandated in PNG’s Oil and Gas Act. 

Arran Energy is also keen to ensure landowners have equity ownership in the project and is committed to ‘gifting’ a working interest to the landowners and Provincial Government.

If the Arran approach is successful, it is hoped that Stanley will provide a development template for its other gas interests in Western Province, previously considered ‘stranded’, such as the Ketu, Elevala, Puk Puk and Douglas fields.

‘These fields contain significant volumes of gas that ultimately need to be aggregated,’ says McGowan.



    Arran Energy Limited must meeting the requirements of the landowners current 30 points position paper to accrue 30%commercial equity. Arran Energy Limited must off load it to landowners otherwise no operation full stop.

    • RORI SKUNEM says

      Rori Skunem, and Dewenai Skunem comment to Wassa, Wassa Sowathy you are just wasting your time on Stanley project, I want to tell you, you are not Land owner in Stanley project, your Land is in Balimo,

      Thanks Wassa Sowathy read this message and stop it OK

      • Micahel Mosko Pyanne says

        My Awin/Yongom/Ningerum brothers & sisters dont fight over resources or we will be like Tari’s after over 150 shipment social mapping is still going on & no benefits coming to resources, still fighting over ownership. What God had bless us reach understanding to share there is enough for all of us. life is short.

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