Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Five facts on Exxon's remote Papua New Guinea gas project

Published 05/03/2018, 07:24 pm
Updated 05/03/2018, 07:30 pm
© Reuters.  Five facts on Exxon's remote Papua New Guinea gas project
TTEF
-
OSH
-
XOM
-
STO
-
NG
-

By Henning Gloystein

SINGAPORE, March 5 (Reuters) - ExxonMobil XOM.N isassessing the damage to its Papua New Guinea natural gas exportproject after a strong earthquake forced the company to suspendproduction.

Here are five facts about one of the world's most remote andchallenging liquefied natural gas (LNG) and condensateproduction and export facilities.

REMOTE LOCATION

The Papua New Guinea LNG (PNG LNG) project opened in 2014 inthe South Pacific country, one of Asia's poorest and mostpolitically troubled despite its resource wealth.

The main processing facility, the Hides Gas ConditioningPlant, sits in the rugged highlands of Hela Province and handlesup to 1 billion cubic feet of gas daily from eight wells.

The site's remote location required chartering huge RussianAntonov cargo planes to deliver equipment to a jungle airfieldat Komo, the longest airstrip in Papua New Guinea.

Hides is linked by a 700-km (435 miles) pipeline snakingthrough the jungle to the LNG plant and export terminal near thecapital city Port Moresby.

QUAKE DAMAGE

A powerful 7.5 magnitude earthquake struck near the Hidesfacility on Feb. 25, killing dozens of people and knocking outproduction. The quake damaged power infrastructure and the Komoairfield.

Before it can restart the facility, Exxon (NYSE:XOM) will inspect thepipeline and check the gas field for structural damage.

The export facility near Port Moresby, where the gas isliquefied for shipment on tankers, was not damaged, Exxon hassaid.

PRICE TAG

Exxon's main partners in the project are currentlyAustralia's Oil Search OSH.AX and Santos STO.AX .

In 2012, Exxon blamed unfavourable foreign exchange ratesand delays caused by disgruntled workers and landowners for a$3.3 billion spike in costs, raising the price tag to $19billion.

However, Exxon stunned markets when it completed the projectin 2014, ahead of schedule and producing at up to 25 percentabove its annual 6.9 million tonnes nameplate capacity.

TROUBLED PAST

Not all has gone smoothly for Exxon in Papua New Guinea.

In November 2017, the company evacuated some staff andsuspended "non-essential work" due to unrest in Hela Province.The violence was linked to national elections and disputes overroyalties from the PNG LNG project.

In 2012, a landslide near a quarry used by Exxon killed atleast 25 people and raised questions about the safety ofexcavations. Exxon said it had closed the quarry five monthsbefore the landslide.

BIGGER FUTURE

Only days before the Feb. 25 quake, Exxon said it had agreedto plans with French energy major Total TOTF.PA to doublecapacity at PNG LNG at an estimated cost of $13 billion. was not clear if the quake had affected those plans.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^GRAPHIC: Papua New Guinea quake IMG

http://tmsnrt.rs/2ow1YLR

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.