PNG LNG set output record in June

OREANDA-NEWS. August 01, 2016. The Papua New Guinea LNG (PNG LNG) export project in June achieved an annualized production rate of 8.2mn t/yr, equivalent to 1.05 Bcf/d (30mn m/d) of gas, its highest monthly output ever, ExxonMobil said today.

ExxonMobil operates the project with roughly a 33pc share. PNG LNG, which came on line in April 2014, last year produced 7.4mn t, or 7pc more than its nameplate capacity of 6.9mn t/yr, ExxonMobil vice president of investor relations Jeff Woodbury said during an earnings call. PNG LNG ran at an annualized rate of 7.7mn t/yr in January-June this year, the company said earlier this month.

PNG LNG is one of the most likely places where ExxonMobil might expand its LNG capacity, as costs would be lower than other locations because it is a brownfield facility, Woodbury said. In addition, ExxonMobil's planned \\$2.5bn acquisition of Papua New Guinea-focused producer InterOil, announced on 21 July, would provide gas resources for such an expansion.

InterOil's main asset is its 36.5pc stake in petroleum retention license (PRL) 15, which contains the onshore Elk and Antelope gas fields. Oil Search owns 22.8pc of the PRL 15 and 29pc of PNG LNG.

The global LNG market likely will be oversupplied into early the next decade, but ExxonMobil expects LNG demand to triple by 2040, Woodbury said.