Santos' another LNG maneuver

Australian-listed Santos, with significant oil and gas operations in Indonesia, announced today that Papua New Guinea (PNG) LNG project participants have reached alignment on the commercial terms with three major LNG buyers in the Asian region for sales of approximately 4.3 million tons per annum. Another threat for Indonesian LNG.

Santos said a fourth LNG buyer is awaiting government approval of key commercial terms for the remaining 2 million tons per annum of production capacity.

PNG LNG project is a neighbor for Indonesia's Tangguh project in West Papua. The project will develop resources in the Hides, Angore, and Juha fields and the associated resources in Kutubu, Agogo, Gobe and Moran, PNG. The gas will be transpored by pipeline to an LNG facility 20-km northwest of Port Moresby on the coast of the Gulf of Papua. The gas will be liquefied, enabling export by ship of approximately 6.3 million tons per annum of LNG.

The project is operated by ExxonMobil and is currently in the front end engineering and design (FEED) stage. FEED is expected to conclude with a final investment decision in the fourth quarter of 2009. Santos has a 17.7% interest in FEED phase of the PNG LNG the project, while others are ExxonMobil (41.5%), Oil Search (34%), Nippon Oil Exploration (5.4%), MRDC ( a PNG company representing landowner interests) with 1.2%, and Eda Oil 0.2%.

ExxonMobil Gas and Power Marketing Company said in a press release this morning that it expects to commence the delivery of LNG by late 2013 or early 2014. 

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