ExxonMobil, Papau New Guinea Sign P’nyang Gas Agreement

ExxonMobil and the state of Papau New Guinea have signed a gas agreement that provides the fiscal framework for the P’nyang field development to deliver LNG by constructing new upstream facilities in Western Province linked to existing infrastructure. The deal is subject to a final investment decision by the P’nyang project co-venturers Amplolex, Santos, and JX Nippon.

The P’nyang field is located within Petroleum Retention License 3, which covers 105,000 acres. The gas field was first discovered in the 1990s by then operator Chevron Niugini Ltd. It is estimated to hold 4.36 Tcf of gas.

“On behalf of ExxonMobil and the other co-venturers, I thank the PNG national government along with the government of Western Province for their partnership in moving the P’nyang project forward,” said Liam Mallon, president, ExxonMobil Upstream Oil and Gas. “The P’nyang project gas agreement marks a significant milestone and underscores the intent of all stakeholders to set a clear framework toward the P’nyang project’s future development.”

The P’nyang development in Western Province is proposed to commence following the Papua LNG project, which will be located in Gulf Province. The phased approach to gas development would support ongoing economic growth in Papua New Guinea. The P’nyang project will be an independent project with landowner benefits to be provided under a future benefit-sharing agreement to be negotiated by the State in accordance with the Oil and Gas Act.

ExxonMobil is continuing to work with the government regarding its interest in purchasing additional equity in the project.

The P’nyang project would provide about 4 years of additional construction activity after Papua LNG and drive economic benefits for the country and participating provinces. Upon completion, the P’nyang Project would make available up to 5% of gas produced to Western Province or another agreed location to support the government’s electrification efforts.

Esso PNG P’nyang Limited, a subsidiary of ExxonMobil, operates Petroleum Retention License 3 and, together with Ampolex (Papua New Guinea) Limited, has a 49% interest. Affiliates of Santos and JX Nippon have a 38.5% interest and 12.5% interest, respectively.