Wednesday, April 25, 2012

InterOil willing to work with government on LNG project


InterOil yesterday (Tuesday) denied that it had been rejected by the National Executive Council for the controversial Gulf LNG project, The National reports.
It also clarified that the deadline for final investment decision (FID) was June 2013.
The company’s vice-president of capital markets and investor relations, Wayne Andrews said InterOil was willing to work with the government and state-owned Petromin develop the Gulf LNG project, after a week of controversy which made local and international headlines.
He said since the company’s formation 15 years ago, InterOil had spent “hundreds of millions of dollars to help develop PNG’s resources and benefit its people”.
“The NEC has not rejected InterOil, but has required that we seek to introduce an internationally-recognised LNG operator into the project and that we adhere to the capacity interval set forth in the 2009 project agreement,” he said.
“Last year, we determined that LNG market conditions were favorable to seeking an ‘internationally-recognised LNG operator’.
“With the help of our investment banks, we are on schedule to partner with an internationally-recognised LNG operator in order to satisfy the remaining requirements of our 2009 project agreement commitment.
“We are pleased with the level of interest among companies that fit the profile required by the NEC and anticipate a positive conclusion to the deal process by the end of this quarter.
“The process we are undertaking to introduce a major partner will naturally have some influence upon the shape of the project and we are diligently working to comply absolutely with the terms of the project agreement.
“We will continue with our efforts to work with the government and with Petromin.
Andrews said there was no deadline for front end engineering and design (FEED) as claimed by some parties, with the only deadline being for final investment decision (FID).
“The only date specified in the 2009 project agreement is for FID, the decision a company makes to proceed with a project,” he said.
“That date is June 2013.
“FEED generally needs to be completed before FID because the economics of the project is the measure used to determine if a project is profitable – which is the key factor behind FID.
“That being said, the economics of the Gulf LNG project are sufficiently compelling to justify a positive FID even at the current stage of our FEED process, and we anticipate that FID will occur almost immediately following NEC approval.”
Andrews said the Gulf LNG project was developed with PNG government support over the last two years with a phased development.
“FEED is well advanced and we don’t anticipate any difficulties completing FEED within sufficient time to meet the FID date provided for in the project agreement,” he said.
“We have completed FEED on the gathering system from wells to the condensate stripping plant (CSP).”

1 comment:

  1. Anonymous3:50 AM

    Looks like Dumatok can learn something from Interoil:

    “InterOil invested in PNG when no other company would take that risk. InterOil committed and funded large sums of risk capital in exploration and found the largest field in the country. This is one of the primary reasons that many major oil companies would like to come back to PNG to do more exploration. Since the company’s formation 15 years ago, InterOil has spent hundreds of millions of dollars to help develop PNG’s resources and benefit its people.”