The proposed LNG project would be developed by InterOil and its joint venture partners Pacific LNG Operations and Petromin PNG. The project targets a $5 to $7 billion LNG facility, with multiple trains. Additionally, the agreement provides for the expansion of the plant up to 10.6 million tons per annum. While current plans call for first production of LNG towards the end of 2014 or beginning of 2015, InterOil is progressing a proposed liquids stripping plant, to be located in Gulf Province, in late 2011 or early 2012.
The agreement sets fiscal terms for a twenty year period, which include a 30% company tax rate and certain exemptions applicable to large scale projects of this nature. It also provides for a 20.5% ownership stake to be held by the Government of Papua New Guinea’s nominee, Petromin PNG. A further 2% ownership stake will be taken by landowners directly affected by the plant.
Phil Mulacek, CEO of InterOil, said: “The Government of Papua New Guinea has firmly demonstrated its commitment to delivering a stable, long-term supply of energy to a growing Asian market. The recent agreements set the stage for PNG to become a significant new Asian energy hub.”
InterOil is developing a vertically integrated energy business, whose primary focus is Papua New Guinea and the surrounding region. The company’s assets consist of petroleum licenses covering about 3.9 million acres, an oil refinery, and retail and commercial distribution facilities, all located in Papua New Guinea.
