Oil Search managing director Peter Botten hailed the reaching of the Papua LNG fiscal agreement as another big moment for PNG.

The major breakthrough came when French energy giant Total, operator of the Papua LNG Project, ExxonMobil and Oil Search signed a Gas Agreement with the PNG Government, defining the fiscal framework for the Papua LNG Project.

“This is a major milestone for the Papua LNG Project. We believe the fiscal and other terms of the Gas Agreement equitably allocate Project benefits and returns to the State, the Project participants and other stakeholders.

“The signing of this important agreement will allow all Papua LNG Project parties to proceed with confidence into Front End Engineering and Design (FEED) related activities, commencing with contractor selection and engineering contracting.

“In addition, the PRL 15 Joint Venture has reached alignment on a suite of agreements which will support the Papua LNG Project taking the next step towards development, including those related to PNG LNG Project site and facility access. “

The Papua LNG Gas Agreement includes:
* A Domestic Market Obligation (DMO), which will provide gas for sustainable future domestic usage; and
* A deferred payment mechanism for the State’s payment of past costs, easing the financial burden associated with the State’s acquisition of its equity interest in the Papua LNG Project.

“The signing of this important agreement will allow all Papua LNG Project parties to proceed with confidence into Front End Engineering and Design (FEED) related activities, commencing with contractor selection and engineering contracting,” Mr Botten added.

“ In addition, the PRL 15 Joint Venture has reached alignment on a suite of agreements which will support the Papua LNG Project taking the next step towards development, including those related to PNG LNG Project site and facility access.

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Oil Search’s focus will now move to working with PRL-3 operator, ExxonMobil, and the State to close out an agreement with the State for the development of the P’nyang field and the commencement of the FEED phase for the proposed three-train integrated development at the PNG LNG plant site.

This will also include FEED for the Associated Gas Expansion (AGX) Project, operated by Oil Search. FEED is expected to result in a Final Investment Decision in 2020, which will ensure that first production from our new, globally competitive, LNG trains is available in 2024.”