Papua New Guinea LNG Terminal (Exxon)
|This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.|
Papua New Guinea LNG Terminal (Exxon), also known as PNG LNG, is an LNG terminal in National Capital District, Papua New Guinea.
The LNG Plant is located 20 kilometres northwest of Port Moresby, at Caution Bay on the south coast of PNG’s Central Province.
- Parent: ExxonMobil (33.20%), Oil Search (29%), Santos (13.53%), Nippon Oil (2.34%), Marubeni (2.34%), PNG Government (19.58%)
- Location: Port Moresby, National Capital District, Papua New Guinea
- Coordinates: -9.33862, 147.01825 (exact)
- Capacity: 6.6 mtpa, 0.95 bcfd
- Additional Proposed Capacity: 3.3 mtpa, 0.78 bcfd
- Status: Trains 1-2: Operating; Trains 3: Proposed
- Type: Export
- Start Year: Trains 1-2: 2014; Train 3: 2023
Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day
The Papua New Guinea liquefied natural gas (LNG) project was constructed at a cost of US$19 billion. The project involves extracting natural gas from the Papua New Guinea highlands, where it is processed before being sent via some 700 kilometres of pipeline to the PNG LNG plant in Port Moresby. The gas is then liquefied and transferred into ships for sale offshore. Construction for the project began in 2010, and the first gas shipment was made in May 2014.
The terminal has two trains with a capacity of 6.6 mtpa. A third train of 3.3 mtpa has been proposed but it was reported in February 2020 that talks between ExxonMobil and the government had broken down over the issue of profit-sharing.
According to ExxonMobil's InterOil, there is enough gas between the Elk-Antelope and P’nyang gas fields in Papua New Guinea to justify three LNG trains by 2023 to 2025, in addition to the existing two trains at PNG LNG.
In April 2020, the energy and shipping brokerage Poten & Partners disclosed that the final investment decision (FID) for Train 3 had been delayed beyond the original FID timeframe of 2020-2021. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay. It was previously reported, in February 2019, that the export credit agencies of Japan, South Korea, China and Australia were in discussions over the financing of the terminal's proposed expansion. In 2010, Japan Bank for International Cooperation, China Exim Bank and Export Finance and Insurance Corporation Australia were all significant financial backers of Phase 1 of the project alongside commercial banks.
In July 2020, the Australian partner Oil Search disclosed that a majority of workers at the delayed expansion project have been idled due to adverse economic conditions brought on by COVID-19.
Landowners and communities displaced by the project were promised benefits such as income streams and infrastructure development. Few of these promises have been fulfilled, however; for example, the township of Komo contains a newly-built hospital building that has no beds, staff, or fuel for the building's generator.
As a result, leaders of area communities organised to blockade the LNG facility by shutting off gas taps at several wells in August of 2016. Security guards attempted to stop the blockade, however, the leaders were armed. They then entered the plant site, locked site gates, and demanded the government honour original project agreements. Armed unrest over the project's failure to deliver agreed-upon benefits to the local population is ongoing.
In January 2019 it was reported that royalty payments from the project to local residents have been much smaller than had been promised by the government.
Articles and resources
- "Papua New Guinea gets a dose of resource curse as ExxonMobil's natural gas project foments unrest," ABC News, March 9, 2017
- "PNG Liquefied Natural Gas (LNG) Project, Papua New Guinea," Hydrocarbons-Technology, accessed Aug 2017
- Papua New Guinea calls off talks with Exxon, Oil and Gas 360, Feb. 3, 2020
- Dan Murtaugh and Sharon Cho, "PNG Government Prefers Exxon, Total Pursue 2nd LNG Project," Bloomberg, September 21, 2016
- John Snyder FID’s delayed by global uncertainty Riviera Maritime Media, Apr. 24, 2020
- Jonathan Bell Key LNG projects line up ECA financing TXF, Feb. 6, 2019
- PNG LNG Phase I IJGlobal, accessed May 27, 2020
- Nathan Richardson, "Total, Exxon demobilize PNG LNG expansion workers due to COVID-19: Oil Search", S&P Global, Jul. 21, 2020
- In Papua New Guinea, Exxon's giant LNG project fuels frustration, Reuters, Jan. 16, 2019