What business opportunities will flow from the Papua LNG project?

Welcome,

More details have been revealed about the planned TotalEnergies-led Papua LNG gas project and how businesses can get involved. Business Advantage PNG summarises what we now know about potentially the largest investment in Papua New Guinea in over a decade.

The Papua LNG project will use the same export facilities at Caution Bay as the existing PNG LNG project. Credit: ExxonMobil PNG.

Last week in Port Moresby, the business community received an extensive briefing from project partners TotalEnergies, ExxonMobil and Santos on the plans to construct the Papua LNG project, expected to be the single largest project constructed in PNG since the completion of the PNG LNG project in 2014.

Previous estimates suggest the project, based on the Elk and Antelope gas fields (PRL15) in Gulf Province, will require investment in excess of US$10 billion (K35.2 billion).

While a final investment decision (FID) on the project is not expected until the end of 2023, the process of front end engineering and design has begun and businesses are now being invited to pre-register for both early works contracts and for work under the expected engineering, procurement and construction (EPC) contracts that will follow FID.

‘Products and services for which the Papua LNG project is seeking expressions of interest include civil works, security, training, transport and logistics.’

The construction phase of the project, which is expected to take until early 2028, will be managed primarily by project lead TotalEnergies, with ExxonMobil PNG taking responsibility for the expansion of its LNG Plant in Caution Bay near Port Moresby, from where the Papua LNG gas will be exported.

Early works

The Papua LNG project will bring gas from the Elk and Antelope fields in Gulf Province by pipeline to Caution Bay near Port Moresby for export. Credit: TotalEnergies

According to presentations from TotalEnergies and ExxonMobil PNG last week, while the project’s major EPC contracts won’t be issued until after FID, early works are expected to commence ‘upstream’ at the Elk and Antelope gas fields in PNG’s Gulf Province as early as Q1 of 2023.

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These will provide an early opportunity for local businesses to get involved in the project.

Due to the lack of infrastructure close to the fields, attendees at the briefing were told, 45 km of new roads and bridges will need to be constructed, as well as a new quay, logistical base and airstrip infrastructure at the project’s Herd Base on the Purari River. Early works for this stage will include the construction of a quarry.

Once FID is achieved, work will commence on the construction of an upstream Central Processing Facility close to Herd Base, to process both condensate and gas from the fields. Work on this is planned to commence in Q2 of 2024 and be completed before the end of 2027.

Once processed, the condensate and gas will be sent down a set of parallel pipelines, running 64km overland to Orokolo Bay in Gulf Province, and then for 260km across the Gulf of Papua to ExxonMobil’s LNG Plant Caution Bay near Port Moresby. Pipeline construction is scheduled for commencement in early 2024 and completion in Q1 of 2027.

Finally, the LNG Plant, currently used to compress gas for export for the ExxonMobil-led PNG LNG project, will need to be expanded to accommodate the new PRL15 gas, with an additional two trains to be constructed, as well as condensate storage and a new flare system.

Local content

While a formal national content plan of the Papua LNG project has yet to be signed off by PNG’s Minister for Petroleum, Kerenga Kua, businesses attending the briefing were advised of the intent to involve local businesses wherever possible. Given the complexity of the project, there are likely to be several levels of ‘cascading’ contracts operating under the EPC contracts.

Products and services for which the Papua LNG project is seeking expressions of interest include civil works, security, training, transport and logistics, accommodation, catering, ICT services, waste management, medical services, engineering, recruitment, plant equipment supply, construction supplies and food and drinking water supply.

Businesses seeking to supply these to the project can express their interest in doing so here.

More briefings and forums are expected next year as the project progresses towards FID.

Who owns the Papua LNG project?

The venture partners in the Papua LNG project are currently TotalEnergies (31.1 per cent), ExxonMobil (37 per cent) and Santos (22.8 per cent). A final investment decision is expected to trigger the PNG State’s direct involvement in the venture, with the following percentages expected:

  • TotalEnergies (31.1 per cent)
  • ExxonMobil (28.7 per cent)
  • Santos (17.7 per cent)
  • Kumul Petroleum Holdings Limited (20.5 per cent)
  • Mineral Resources Development Corporation (2.0 per cent)

To follow our coverage of the Papua LNG project and PNG’s other mineral and non-mineral projects, subscribe to our regular PNG Business Update newsletter here.

Comments

  1. Ruth Norum says

    What is the tender due date?

  2. Albert Numalik says

    Is Eastern Highlands Province part of the Projects??

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