Santos Ltd. announced Wednesday that the PNG LNG Project participants have entered into a heads of agreement with Unipec Asia Co. Ltd., a subsidiary of China Petroleum & Chemical Corp. (Sinopec) for the long-term supply of 2 million tonnes per annum of LNG.
The Project is working with Sinopec to finalize a binding sale and purchase agreement for the LNG.
PNG LNG remains on track for a final investment decision later this year.
The PNG LNG project proposes to commercialize the undeveloped petroleum resources in the Hides, Angore and Juha fields and the associated gas resources in the currently operating oil fields of Kutubu, Agogo, Gobe and Moran in the Southern Highlands and Western provinces of PNG. The gas will be transported by pipeline to an LNG facility 20 kilometers northwest of Port Moresby on the coast of the Gulf of Papua. The gas will be liquefied, enabling export by ship of approximately 6.6 million tonnes per annum of LNG.
Santos has a 17.7% interest in the front end engineering and design phase of the PNG LNG Project. The other participants are ExxonMobil, Oil Search, Nippon Oil Exploration, MRDC (a PNG company representing landowner interests) and Eda Oil. Santos expects to have a participating interest of approximately 13.7% after the PNG Government back-in to the project. Santos' participating interest is subject to an equity determination process which will take place before the final investment decision.