Wednesday, December 9, 2009

LNG in Papua New Guinea

I read in the Financial Times today that Exxon has committed to go ahead with a $15 billion LNG facility in Papua New Guinea.  The project is reputed to be "the best underdeveloped gas project outside Qatar," where Exxon also is a big player.  The project is not yet a done deal, as financing and sales commitments remain to be completed.  So far, a portion of the facility's annual capacity if 6.6 million tons (about 308 Bcf/year) is committed to China and Japanese companies and negotiations are underway for the remaining portion (more at wsj.com). 

Last week, there was big news that Tokyo's utility locked in a 20 year LNG contract for about 4 million tons annually (about 187 Bcf/year) with a Chevron facility in Australia.  There is definitely some jockeying going on to lock in major Asian gas customers to get some of the big LNG projects off the ground.

The amount of LNG coming onto the market in the next decade is mind boggling.  Hopefully most of it will go east rather than west.

5 comments:

Anonymous said...

It's actually only 6.6 metric tons per year, that's 308.2 bcf/yr or less than 1 bcf/day.

LNG conversion chart.
http://www.sempralng.com/Files/pdf/LNG_CardLrg102904.pdf

Anonymous said...

So you think shale gas are good producers.
WORLD RECORD
RATE OF 705 MMCFD INCLUDING 11,200 BBLS PER DAY OF
CONDENSATE

Robert Hutchinson said...

Many thanks for a more precise conversion.

But I read the article to say that there is 6.6 million tons remaining annual capacity on top of the 3.8 million tons:

"However, the project consortium has yet to conclude sale contracts for the remaining 6.6m tonnes of capacity"

That's how I got to 10.4 million tons.

Robert Hutchinson said...

I'd love to own the land on top of the Antelope-2 well (although I'm not sure I would want to live in Papua New Guinea). That would be a cool royalty check to get in the mail.

Anonymous said...

It 3.8 million tonnes for China's Sinopec and to Tokyo Electric Power Company

and they are finalizing a deal for the remainder of 2.8 million tonnes with Osaka Gas of Japan Taiwan's state-owned refiner CPC.

Total is 6.6 million tons per year with no excess for the spot market.