The partners in Papua New Guinea’s second LNG plant have chosen Caution Bay as the processing site for the Elk-Antelope project, paving the way for close cooperation with the nearby ExxonMobil PNG LNG venture.

Location of new and existing LNG plants. Credit: Oil Search

The Total-led Elk-Antelope liquefied natural gas venture, whose partners include InterOil and Oil Search, say the LNG processing plant will be located at Caution Bay, about 20 kilometres north-west of Port Moresby and adjacent to the existing PNG LNG site.

The site of the upstream processing plant will be located near the Purari river in Gulf Province, about 360 kilometres north-west of Port Moresby.

The pipeline routes to bring the LNG to Caution Bay will include 75 kilometres onshore and 265 kilometres offshore.

Oil Search CEO Peter Botten

It’s a ‘significant milestone’ for the project, according to InterOil chief executive Mike Hession in a statement.

‘The location of the LNG site at Caution Bay will also maximise the opportunity to pursue potential synergies with the PNG LNG project,’ said Peter Botten, managing director of Oil Search, which has a stake in both projects.

The project will be known as Papua LNG.

Botten says the decision means the partners can ‘commence early engagement with key stakeholders, including state, provincial and local governments as well as local communities’.

Hession said decisions on the final structure of the Papua LNG venture, and the production capacity, would be made once further drilling had been carried out, and preliminary engineering work would get under way later in 2016.

Analysts reported last November the US$20 billion (K50 billion) project would take at least five years to build with the first LNG exports due in late 2020 or early 2021.

Opposition

However, Gulf Provincial government and landowners have rejected the developer’s intention to pipe gas out of Gulf province, and is seeking a meeting with the Prime Minister.

Governor Havila Kavo has told EMTV Gulf is a maritime province and its resource should be exported directly.

He also says the developer’s intention to change the name of the project is also unacceptable.