PNG LNG Project

In a statement on July 20^th, Oil Search Limited Managing Director, Peter Botten, said the mid-term LNG SPA with PetroChina International (Hong Kong) Corporation Limited (PCI) is for a supply of approximately 0.45 million tons of  per annum (MTPA) of LNG over a three-year period.

This SPA takes the total contracted volumes from the Project to 7.0 MTPA, with 6.6 MT of PNG LNG's annual output already committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC.

This drop is reflected in the shut in of Oil Search-operated production and the PNG LNG Project following the 7.5 magnitude earthquake that struck the PNG Highlands on 26 February 2018.

Oil Search has now revised its 2018 production guidance to 23 – 26 mmboe, while unit production costs are expected to be in the range of US$10.50 – 13.50 per boe and depreciation and amortisation charges are forecast to be between US$12 and US$13 per boe. Capital cost guidance has been reduced to US$425 – 520 million.

This was from the executive board of the International Monetary Fund (IMF), in consultation with PNG on November 29, 2016.

“As a commodity exporter, the PNG economy has been hit hard by the drop in world commodity prices and a major drought. The authorities have responded to these shocks through fiscal tightening and a combination of modest exchange rate depreciation and FX sales,” the board said in a statement.

“Strong economic growth driven by the start of the PNG LNG project, has tailed off amidst weak non-resource sector growth.