Power costs rise at Porgera

THE ExxonMobil-led Petroleum Development Licence 1 joint venture has struck a higher priced deal from Barrick Gold over the gas used to generate electricity for the Porgera gold and silver mine in Papua New Guinea’s Enga province.
Power costs rise at Porgera Power costs rise at Porgera Power costs rise at Porgera Power costs rise at Porgera Power costs rise at Porgera

In February, Barrick chief executive officer Aaron Regent, who was sacked by the board in June, warned of higher costs ahead.

Oil Search, which owns 21% of PDL 1, said up to 56 billion cubic feet of gas and associated liquids would be supplied under the new deal, which was an extension of the previous long-term sales agreement.

Prices were not revealed, but it's clear they went up, which will have an impact on Porgera's costs of production as it aims to continue mining into the next decade.

"We have been supplying gas to the Porgera joint venture's Hides power station consistently and reliably since 1992," Oil Search managing director Peter Botten said.

"An extension of the Porgera mine life has led to a requirement for an ongoing supply of energy until at least 2021.

"Under the new gas sales agreement, pricing terms have been amended to reflect the prevailing market price for gas in PNG and the increased cost to Oil Search of acquiring this gas from the other PDL 1 joint venture partners. We look forward to continuing our long-term supply arrangements with Barrick."

Exxon's PNG subsidiary Esso Highlands owns 47.5% of PDL 1.

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