The national cabinet has approved the US$300 million (K829 million) development of the Stanley gas-condensate field in Western Province.

Petroleum & Energy Minister, Nixon Duban

Petroleum and Energy Minister Nixon Duban has told the project operator, Horizon Oil, the National Executive Council has approved the signing of a gas agreement with Horizon and its partners.

Cabinet has also approved a benefit sharing arrangements among the local landowners, according to a statement by Horizon’s CFO, Michael Sheridan.

Stanley will initially be developed as a condensate extraction project with reinjection of dry gas.

A condensate recovery plant will be built at Stanley field along with a liquids pipeline to Kiunga on the Fly River. Storage will be built at Kiunga while a river tanker being built in Jiangsu in China will ferry the condensate to market outlets.

The granting of the licence will see Horizon Oil’s sale of 40 per cent of its PNG assets to Osaka Gas for US$77 million. This sale marks the beginning of a 60/40 strategic alliance between Horizon Oil and Osaka Gas, one of Japan’s largest utility companies and LNG importers.

The Stanley Gas Project in brief

• Location: Western Province
• Shareholders: Horizon (30%), Osaka Gas (20%), Talisman Energy (40%) and Mitsubishi (10%) [Subject to reduction to allow for PNG State Nominee participation at 22.5%]
• Capacity:  8 million of barrels of condensate over a 10 year period
• Timeline: Condensate production and cash flow by late 2015