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PNG Cabinet conditionally approves InterOil LNG

RICK WILKINSON | Oil & Gas Journal

InterOilTHE PAPUA NEW GUINEA CABINET has approved InterOil Corp’s Gulf LNG project to be supplied by the Elk-Antelope onshore gas fields with conditions including a 50-50 split of the development between the government and InterOil.

The government will acquire an additional 27.5% stake over and above its legal 22.5% entitlement. It is probable that some of this equity will be managed for the benefit of landowners.

Elk and Antelope are carbonate reservoirs, technically part of the same field, but separated by a major fault.

O’Neill said an internationally recognised LNG operator should operate the upstream facilities, meaning the government still wants a major player to buy an operating stake in Gulf LNG.

A Ministerial Gas Committee headed by Petroleum and Gas Minister William Duma has been formed, while a separate bureaucratic negotiation team has been established with representation from the Petroleum Department, Treasury, the Justice Department and the government’s operating company, Petromin.

These teams have been charged with fast-tracking the negotiations leading to commercialisation of the country’s second LNG project.

A number of questions still remain including how the government will finance the acquisition of an additional 27.5% stake.

Ongoing negotiations will also need to decide what form the plants will take—conventional, modular or floating LNG.

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Phil Fitzpatrick

It's interesting that the purchase of equity in the InterOil project coincides with the negotiation of a large loan from the Chinese.

Do I smell a rat here?

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