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Thursday, June 21, 2012

O’Neill-Duma LNG row over Gulf LNG

By MALUM NALU

PRIME Minister Peter O’Neill and his Petroleum and Energy Minister William Duma – who has openly campaigned that he wants to be next prime minister – appear to be on opposite sides of the controversial issue regarding InterOil’s Gulf LNG project, The National reports.
InterOil, the meat in the sandwich, has jumped into the fray by supporting O’Neill just days before voting in the 2012 elections begin.

InterOil’s Antelope 2 well during flow test on December 1, 2009.-Picture by INTEROIL CORPORATE COMMUNICATIONS
The continuing drama and intrigue over InterOil’s Gulf LNG project continued yesterday with Duma calling on the company to deliver the project, just days after O’Neill said he supported InterOil.
Duma, in a statement released from the office of state-owned Petromin but in his name, reaffirmed the state’s position that InterOil must comply with the project agreement it signed with the state in December 2009 to commercialise the Elk/Antelope gas discovery.
This somewhat contradicts O’Neill’s statement last Friday, reiterating strong support for InterOil’s Gulf LNG project and expressing hope that the company would progress its development quickly.
“Under the agreement, InterOil committed to build a 7.6 million tonne per annum to 10.6 million tonne per annum LNG processing facility,” Duma said.
“The facility is to be operated by an internationally-recognised LNG operator.”
Duma said InterOil had deviated from this contract and was “instead proposing a staged small-scale LNG project, which they indicated will be operated by companies not internationally recognised LNG operators in the so-called ‘Gulf LNG Project’”.
“The staged development proposal by InterOil has been rejected by the state,” he said.
“Furthermore, the state through the Department of Petroleum and Energy has given InterOil Corporation 180 days notice to show cause why the project agreement should not be terminated if they did not deliver the project in the project agreement.”
Duma said as minister responsible for the Oil and Gas Act, he supported the development of a second large-scale LNG project.
He therefore called on InterOil to cooperate with the state and deliver the project as called for in the project agreement.
Duma said the onus was on InterOil to commit to developing the project in the agreement and the facility could be located in the Gulf province.
InterOil said on Tuesday it was pleased to have the support of O’Neill.
“The company looks forward to bringing the next world class LNG project to Papua New Guinea in complete satisfaction of the 2009 LNG Project Agreement,” it said.
“Additionally, recent exploration activities have yielded several drill ready prospects which appear to be promising for future resource additions.
“We plan to put our second drilling rig to work in the next few weeks to drill two delineation wells in Petroleum Retention License 15, followed by two exploration wells in Petroleum Prospecting Licenses 236 and 238.”

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