Thursday, June 07, 2012

InterOil denies meeting Chevron for Gulf LNG talks

InterOil has not made comments to media regarding Chevron or others that might be interested in the development of the Gulf LNG Project, as reported in The National yesterday.
Corporate communications officer Damaris Minikula said in light of recent media reports, InterOil was following normal government processes and was complying with protocol by responding accordingly through the government regulator, Department of Petroleum and Energy, regarding the recent notice to terminate the 2009 Liquid Niugini Gas Project Agreement.
“InterOil is waiting for the government, through the Department of Petroleum and Energy, to respond accordingly,” she said,
Meanwhile, Australian Financial Review reports that InterOil’s ambitions to develop PNG’second LNG project appear close to collapse after a flare-up in tensions with the government over the structure of the venture.
PNG Petroleum Minister William Duma last Thursday issued a notice warning of the termination of a 2009 agreement that InterOil had with the government covering the framework for the LNG project.
He said InterOil needed to sell a majority stake in its gas resources in PNG to a major LNG operator, which would also run the LNG venture.
Relations between US-listed InterOil and the PNG government have been deteriorating over the past months in an increasingly bitter dispute over the project, which would be the second LNG venture to be developed in PNG after ExxonMobil’s $US15.7 billion project currently under construction.
InterOil and its affiliate Liquid Niugini Gas planned to develop InterOil’s Elk and Antelope gas fields using two LNG projects: an small onshore one with Australia’s Energy World Corporation and a fixed-floating one with Norway’s Flex LNG.
But the government wants instead one world-scale onshore project of at least 7.6 million tonnes per year of production, run by an internationally recognised LNG operator, along the lines of ExxonMobil’s project.
It is now advising it will terminate InterOil’s project agreement within 180 days, on the grounds that InterOil has not complied with its obligations and has breached the agreement.
“Unfortunately InterOil has for too long insisted on a development structure which is designed to only meet its objectives of controlling the asset and the pace of developing it,” Duma said in a media statement last Thursday.
“In the face of continuing obstruction of the implementation of the 2009 project agreement by InterOil and Liquid Niugini Gas Ltd I have therefore been left with no choice but to issue a notice of intention to terminate the project agreement.”
InterOil and Liquid Niugini Gas are fighting the bid by the government to cancel the project agreement.
In a May 21 letter to Rendle Rimua, the secretary of the Department of Petroleum and Energy, Liquid Niugini Gas director Christian Vinson said the government’s attempts to cancel the agreement were highly damaging to PNG’s international reputation as an investment destination.

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