“In accordance with the terms of the credit agreement, the Minister will grant Horizon Oil and its licence counterparts Stanley PDL 10 and PL 10 within two weeks of its implementation. Just two years ago, the future of Gulf LNG was bleak. InterOil almost lost the project as a result of a dispute with the Government of Papua New Guinea over the project`s export capacity. The initial 2009 project agreement plan called for InterOil to develop an LNG terminal with several trains with a processing capacity of 7.6 MMtpy, with the option of increasing capacity to 10.6 million Mtpy. The announcement marked the end of 18 months of intense cabinet negotiations to approve the project. The area, which includes the project and its gas fields, is located 40 km north of Kiunga and is home to 138 clans, 131 of whom reportedly signed the agreement on 31 May (only one landowner imprisoned for murder is believed to be in prison). Stanley licensing was also the last condition for the sale of 40% of its PNG oil share to Osaka Gas. As part of this agreement, Horizon will receive the first payment of $78 million of the total sale price of $204 million within 10 business days. The dispute was eventually resolved under new conditions requiring the construction of two separate LNG trains, but with a minimum processing capacity of 3.8 MMtpy. InterOil also had to involve an experienced operator to operate the upstream facilities. The company found this operator in December 2013 by signing a contract with the French oil and gas group Total. The agreement brought a touch of life to the project and was able to continue. The agreement imposes significant rights and obligations of the government and licensees for the Stanley project, including the tax conditions of the project and local content obligations.
Of course, for any company operating in a complex international environment, it is not easy to navigate, and optimism about the recent success of the PNG has been somewhat tempered by the declarations of intent of the country`s oil minister, PDL 10, PL 10 and the Stanley Gas Agreement of Horizon and its joint venture partners. “The Minister has asked the licensees to participate in a solemn ceremony for the signing of the Stanley Gas Agreement on April 17. However, InterOil`s plans eventually moved to two LNG projects instead of one. The new plan called for the construction of a FLNG 2 MMtpy vessel and a 2 MMtpy onshore LNG facility. The Government of Papua New Guinea argued that the new export contract was a violation of the 2009 draft agreement. The project began in 2007, when a 3,000 km long pipeline to customers in Australia was deemed unenforceable. ExxonMobil then turned to the concept of LNG exports. In early 2008, a joint enterprise agreement was signed by the project partners and in June of the same year, the project moved to the frontal engineering design phase (FEED).
The NEC has authorized Duban to sign a gas agreement with Horizon Oil Oil (Papua) Limited and its licensees on behalf of PNG. The London-listed oil and gas group Europa Oil and Gas has been granted a one-year extension for the… PNG Petroleum and Energy Minister Nixon Duban has formally informed the company of the PNG National Executive Council`s decision to approve the project.