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Exxon eyes expansion of PNG LNG plant

EXXONMOBIL has signed a memorandum of understanding (MoU) with the Papua New Guinea government that may help it expand its LNG plant in the country.

The deal will see the company agree to supply electricity and up to 20m ft3 of natural gas to power plants across the country. In exchange it will be granted the licences to develop the P’nyang gas field, which could feed a potential third processing train at the LNG plant.

It also set out a timeline for developing the expansion, with ExxonMobil drilling its first appraisal well at P’nyang this year and agreeing to make a final investment decision by the end of 2017. The company has given no indication of how much the expansion project may cost.

ExxonMobil is the operator of the vast PNG LNG project, which it owns in partnership with companies including Oil Search and Santos. The development cost around US$19bn to build with a capacity of 6.9m t/y, and shipped its first cargo of LNG in May 2014.

The company’s move to expand the LNG plant in Papua New Guinea has been seen as a rare sign of confidence in the long-term health of the production and export sector, which in recent months has been racked by plummeting oil prices.

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