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Total scoops InterOil Gulf LNG project in Papua New Guinea

Total takes Elk and Antelope gas fields majority stake

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe Paris-based international oil company (IOC) Total took a leap on the finish line ahead of other majors companies to close a deal with the New York-listed junior Inter Oil Corporation (InterOil) to acquire majority stake in the giant Elk and Antelope gas fields that could sustain the production of liquefied natural gas (LNG) at the Gulf LNG project in Papua New Guinea.

This decision came up as a surprise in the middle of a head to head competition between ExxonMobil and Shell.

Total_InterOil_Gulf-LNG_ExxonMobil_PNG-LNG_Project_mapIn fact each company was competing with different concept to develop these giant Elk and Antelope gas fields , the largest discoveries in Asia within the last two decades.

ExxonMobil was proposing to use these resources to expand its on going PNG LNG project on the east side of the country.

This concept was showing good profitability as it should have shared the infrastructures for the first PNG LNG two trains under construction.

View from the Papua New Guinea Government ExxonMobil may be welcome to proceed to the expansion of its PNG LNG project, but in a second step, only when the country will have previously diversified its partnerships with international companies.

With Shell, the eventual concept to moore a floating liquefied natural gas (FLNG) vessel just along the Papua New Guinea coast line could have arisen concern in the Government about the project contribution to the local added value, even though this scenario would have reduced the environmental footprint of the project in this very sensitive region.

In this context, Total offers to bring its LNG expertise with a conventional LNG plant in continuity with InterOil originally proposed Gulf LNG project could please all parties.

Total and InterOil plan Gulf LNG final decision in 2016

If this tough competition was motivated by the large size of Elk and Antelope discoveries, the question remains: how big?

InterOil published contingency reserves (2C) ranging between:

 – 6.83 trillion cubic feet (tcf) and 10.85 tcf of natural gas

 – 111.5 million barrels (mmb) and 156.3 mmb of condensate

Total and InterOil will continue the exploration in the licensed blocks to investigate all potential upside on the current reserves evaluations.

In this perspective,Total and InterOil are still discussing to share interests beyond the Block Petroleum Retention License (PRL)15 to the Blocks PPL236, PPL237, PPL238.

After the farm-in agreement signed between Total and InterOil, Total holds 61.3% stake in the Block PRL15, but is planning to sell 19.3% to the Papua New Guinea national oil company (NOC) Oil Search.

Total_InterOil_Elk-Antelope_Papua-New-Guinea_Gulf-LNGIn fine, Total and its partners would share the working interests in such a way:

 – Total 42% is the operator after signing the farm-in agreement

 – InterOil 30%

 – Oil Search 28%

Based on a two trains concept, InterOil proposed the Gulf LNG project with a capacity of 8 million tonnes per year (t/y).

A third LNG train could be added in the future depending on the future discoveries.

In the agreement Total is conditioning the development of the Elk and Antelope fields as stand alone LNG project to a minimum of 9 tcf reserves of natural gas.

As a consequence, Total, InterOil and Oil Search will not make the final investment decision (FID) on the Gulf LNG project before 2016 for first operations in 2020.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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2 Comments to “Total scoops InterOil Gulf LNG project in Papua New Guinea”

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