PNG LNG race wide open, but InterOil claims pole position

AN INTEROIL executive denies his company ever sought a liquefied natural gas exclusivity agreement with the Papua New Guinea Government and says given its head start, InterOil is not worried about competition.
PNG LNG race wide open, but InterOil claims pole position

PNG LNG race wide open, but InterOil claims pole position

PNG LNG race wide open, but InterOil claims pole position

PNG LNG race wide open, but InterOil claims pole position

PNG LNG race wide open, but InterOil claims pole position

Interoil vice president investor and public relations Anesti Dermedgoglou said various media reports that suggested an exclusivity deal had been discussed were mistaken.

But the National newspaper continues to insist that InterOil had pursued such an arrangement.

In today's National, Brian Gomez writes that: "This was clearly included in early drafts InterOil submitted to the government, and first raised by Opposition leader Peter O'Neill.

"The exclusive rights for LNG have since been withdrawn after it was clear there would be strong government opposition to the establishment of an LNG monopoly."

However, Dermedgoglou said InterOil, its partner Merrill Lynch and their Liquid Niugini Gas joint venture always accepted that there could be more than one LNG project in PNG.

"There is enough gas in PNG for more than one project but InterOil is far ahead of any other projects," Dermedgoglou said.

"We completed pre-FEED and recruited Jack Hamilton [former North West Shelf LNG director] in 2006 when other people were still talking about a gas pipeline to Australia. Now we are working very hard towards advancing our project to the next stage."

Chief Secretary to Government Isaac Lupari has issued a statement saying that a project agreement for the Liquid Niugini Gas plant would not include an exclusivity agreement and all commercial risk would be borne by InterOil and its partners.

InterOil plans to process gas from the Elk field at the site of its existing oil refinery at Napa Napa, while the ExxonMobil, Oil Search and Santos joint venture, which holds the Hides and Kutubu gas resources, recently put a plan to the government for a large LNG project based at Hall Sound in Central Province, northwest of Port Moresby, the National reported.

Oil Search chief executive Peter Botten has also suggested that one facility with two or more trains owned by different joint ventures could be developed.

An LNG project was crucial for PNG because the lifespan of current mining and petroleum projects would lapse over the next 10-15 years, Lupari said.

He argued that PNG had to "lock itself" into global gas industry market before 2012, if it was to continue its economic recovery.

Lupari yesterday said the proposal by Liquid Niugini Gas was currently the most developed one that had been presented to the state in the form of a draft project agreement.

InterOil was confident that Elk had sufficient reserves to underpin the project, even though they are not provable as yet, Lupari said.

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