South Australian energy and resources company Santos today marked a red-letter day in its growth as a supplier into key Asian markets.
The first shipment of liquefied natural gas (LNG) from the $US19 billion PNG LNG project has left Papua New Guinea carrying a cargo bound for Japan.
Santos is a key partner in the venture – PNG’s largest resource project to date.
“A key part of Santos’ growth strategy is the successful delivery of our transformational LNG portfolio,” Santos Managing Director David Knox said.
“Santos is well and truly a key player in the LNG market and today’s announcement only strengthens our position as a major and competitive LNG supplier to Asia.
“This is an important step for Santos and we look forward to the continued ramp up of LNG production. PNG LNG will quadruple Santos’ LNG production once the project reaches full output.”
The massive project is operated by ExxonMobil and has taken over 191 million work hours to complete.
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“An incredible effort by all,” Knox said.
Santos has a 13.5 per cent interest in the PNG LNG project.
Other co-venturers include affiliates of ExxonMobil (operator), Oil Search, National Petroleum Company of PNG, JX Nippon Oil & Gas Exploration, Mineral Resources Development Company and Petromin PNG Holdings Limited.
The first LNG was taken by cargo ship Spirit of Hela bound for Japan for Tokyo Electric Power Co. Inc. (TEPCO).
“This is a historic moment for Papua New Guinea,” ExxonMobil PNG Limited Managing Director Peter Graham said.
“This is the country’s largest resource project and it has taken the effort of many thousands of people to bring it to fruition.
“With the support of government, our co-venturers and the local community, we are proud to celebrate the safe completion and first cargo from the PNG LNG Project.”
Graham said the Project startup positions Papua New Guinea as a resource-rich nation uniquely placed to deliver natural gas to meet the growing demand of Asia markets over the long term.
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“Revenue from the PNG LNG Project will support Papua New Guinea’s continued economic and social development,” he said.
“The PNG LNG Project demonstrates to the world what Papua New Guinea is capable of delivering.”
Project construction began in 2010.
At peak, more than 21,000 people were employed by the project, including more than 9,000 Papua New Guineans.
Flooding, minimal pre-existing infrastructure and extremely steep slopes were among obstacles that were overcome in constructing the project.
Pipe had to be airlifted in some areas because the soil could not support heavy machinery and lack of infrastructure required construction of supplemental roads, communication lines and a new airfield.
“This project has brought significant economic benefits to our country that will last for generations to come,” said Papua New Guinea Prime Minister Peter O’Neill.
The PNG LNG Project is an integrated development that includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of Papua New Guinea.
More than 700 km of pipeline connect the facilities, which include a gas conditioning plant in Hides, and liquefaction and storage facilities near Port Moresby with project capacity of 6.9 million tonnes of LNG per year.
The project is expected to produce more than 9 trillion cubic feet of gas over the estimated 30 years of operations.
It services four major customers in the Asia region including China Petroleum and Chemical Corp. (Sinopec), Tokyo Electric Power Co. Inc. (TEPCO), Osaka Gas Co. Ltd., and CPC Corp. Taiwan.
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