Third force enters Gulf LNG fray

A new joint bid for a major stake in InterOil’s Gulf LNG project was made last week, according to a source.
Third force enters Gulf LNG fray Third force enters Gulf LNG fray Third force enters Gulf LNG fray Third force enters Gulf LNG fray Third force enters Gulf LNG fray

The only interest confirmed so far is from a consortium of Korea Gas Corporation, Japan Petroleum Exploration and InterOil's Japanese condensate stripping plant partner Mitsui.

Royal Dutch Shell has also held talks with InterOil over "quite some period of time" in the words of its chief financial officer Simon Henry, however, it often stresses that any possible investment must be weighed up against other LNG project opportunities.

An industry source has recently revealed to that there was a fresh bid for an operator stake of Gulf LNG from a new consortium last week.

A key spokesperson from one of the companies involved was not aware of the matter and also told that it did not typically comment around "potential things like that".

It's a tough call to make but will not yet reveal the two companies the source revealed, or the purported outcome of that bid, in order to avoid causing disruptions to the ongoing process.

InterOil's hunt for a government-acceptable operator of the project started in October.

The process was triggered by criticism from Petroleum and Energy Minister William Duma, who has repeatedly warned that the project lacked a world recognised LNG operator, as required by the project agreement struck in late 2009.

The time lost on the operator hunt has hit project timelines.

A recent Korean media report indicated that the project might target first exports at the end of 2017.

InterOil chief executive officer Phil Mulacek said it would be late 2015 or early 2016, "depending on the partner", in a conference call earlier this month.

As of last year, the Gulf LNG project was targeting 5 million tonnes per annum in 2014, with 3Mtpa from an Energy World Corporation-designed onshore modular LNG plant in Gulf province and the rest from a floating LNG facility.

There is also a proposed ramp-up aiming to hit up to 8Mtpa from the total project through 2015 and 2016.

In 2009, the project was based on a 7.6-10.6Mtpa LNG plant near Port Moresby, back when it was known as the Liquid Niugini Gas project.

While he is against a phased development approach, Duma has indicated he is comfortable with the LNG plant being based in Gulf province, which is home to InterOil's Elk-Antelope discoveries that underpin the project.


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