OREANDA-NEWS.  Japanese trading house Sojitz is partnering the Papua New Guinea (PNG) government to utilise the country's natural gas resources to develop a methanol venture.

Sojitz said today it reached an agreement with PNG's state-owned oil firm NPCP to set up a joint venture targeting to develop a methanol project, following years of talks between the two sides about possible gas chemical business opportunities. Sojitz and NPCP are aiming to make a final investment decision on the joint venture in 2017.

Sojitz is hoping its expertise in methanol trading and production will help develop methanol businesses in PNG through the joint venture with NPCP. The trading house has a 1mn t/yr methanol output globally, half of which is produced at its 85pc-owned Kaltim Methanol Industri venture in Indonesia.

PNG has long sought to attract investments in methanol ventures in the country to better utilise its abundant gas resources and advance the country's chemicals industry.

The ExxonMobil-led 6.9mn t/yr PNG LNG project began exports this year. Total and its partners are also working to bring on stream the 5mn-7mn t/yr Papua LNG export project, drawing natural gas from the Elk-Antelope fields. NPCP owns a 16.57pc stake in PNG LNG and has rights to take up to 20pc of the Elk-Antelope fields.