INTEROIL has defended its liquefied natural gas ambitions in Papua New Guinea after new Petroleum Minister Francis Potape challenged the company's projects and its plans to introduce floating LNG technology to the country. At a recent forum held by the country's Institute of Public Administration, Potape reportedly said if companies such as InterOil wanted to test a FLNG facility they should go elsewhere.
"PNG is not a guinea pig where technology can be tested," he said according to The National.
"We will not allow technology that has not been accepted and that has not been internationally practised and approved."
On InterOil's LNG plans for its Elk-Antelope discoveries in Gulf province, Potape reportedly said the project was questionable as the company did not have a proven track record in the petroleum industry.
However, PNG's sole oil refiner has since responded that substantial progress has been made on its Gulf LNG project.
InterOil cited its contingent resource estimate made last year, which included an independent best case estimate of more than 8 trillion cubic feet of natural gas and associated condensate.
The New York-listed company said it had entered various framework agreements over infrastructure and facilities which were contingent on the final investment decision expected before year-end.
InterOil said the start up capacity of its Gulf LNG project was 5 million tonnes per annum in 2014 with potential expansion up to 10.6Mtpa, and these rates were referenced in its 2009 project agreement with the PNG government.
While the company's ambitions also include a modular design onshore LNG plant about 90 kilometres from the Elk-Antelope field, it does not have issues with the technology for its separate floating LNG proposal to tap into this field.
"InterOil believes that none of the technology proposed for the Gulf LNG Project is new, being rather the use of existing technologies in new efficient configurations, and this specific type and size of floating LNG facility is well within the operating envelope of existing floating production storage and offloading vessels and is a viable and economically favourable option to accelerate LNG production from the project," the company said.
InterOil said the PNG government had previously endorsed its separate floating LNG proposal before the appointment of Potape, who replaced William Duma as Petroleum Minister last month.
"InterOil is not in the business of testing new technology and stressed that all technology incorporated in the project is proven and was chosen after a rigorous assessment process," InterOil chief executive officer Phil Mulacek said.
"Our project team is currently working with PNG government agencies to demonstrate that we have the financial capacity, knowledge and the qualified personnel to deliver a world class project to PNG, and in particular to one of the more remote and underdeveloped parts of the country."
InterOil's FLNG partners include Flex LNG, Liquid Niugini Gas and Samsung Heavy.
Wednesday, 27 July 2011
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