PNG LNG partners strike three-year deal with PetroChina

The ExxonMobil-operated PNG LNG project has secured a three-year deal to supply liquefied natural gas (LNG) to Hong Kong-based PetroChina, according to Australian partners Santos and Oil Search.

The agreement will see around 0.45 million tonnes a year (0.45Mt/y) of LNG from the Papua New Guinean operation supplied to PetroChina for 1.35Mt overall.

ExxonMobil is also negotiating further mid-term LNG supply agreements that are expected to increase sales to 1.3Mt/y.

The agreement with PetroChina brings the total project volume to 7Mt/y, with 6.6Mt committed to major Asian customers Sinopec, CPC, JERA and Osaka Gas.

Oil Search managing director Peter Botten said the company was delighted to enter into the agreement with PetroChina, already an active buyer of spot cargoes from the project.

“This is the first mid-term sale to be finalised for the supply of up to 1.3Mt/y (in aggregate) from PNG LNG for a period of up to five years,” he explained.

“ExxonMobil, on behalf of the PNG LNG project participants, is in negotiations with a number of other parties for potential LNG supply agreements, which are expected to be finalised in the near-term.”

The first sale under the SPA is expected to take place this week.

The PNG LNG project is part of a joint venture that includes owner-operator ExxonMobil (32.2 per cent), Oil Search (29 per cent), PNG state-owned Kumul Petroleum (16.8 per cent), Santos (13.5 per cent), JX Nippon (4.7 per cent) and Mineral Resources Development Company (2.8 per cent).