Oil giant, ExxonMobil Corporation’s (XOM) $19 billion Papua New Guinea (PNG) liquefied natural gas (LNG) project has dispatched the first cargo of LNG ahead of schedule.
Operated by ExxonMobil’s affiliate ExxonMobil PNG Limited, PNG LNG, is anticipated to generate over 9 trillion cubic feet of gas over its estimated 30 years of operation. Japan’s Tokyo Electric Power Co. Inc. (TEPCO) will be the recipient of the first cargo.
Construction of PNG LNG, which started in 2010, took over 190 million work hours to be complete. The project engaged over 21,000 people at its peak. The first train commenced production in April, while the second train has also come online with the commissioning of additional wells.
The project faced various challenges such as flooding, minimal pre-existing infrastructure and extremely steep slopes. In some areas, the pipe had to be airlifted as the soil could not sustain heavy machinery and due to the lack of infrastructure which required construction of supplemental roads, communication lines and a new airfield.
The PNG LNG project is an integrated development that comprises gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of Papua New Guinea. The facility is connected by about 435 miles of pipeline, which includes a gas conditioning plant as well as liquefaction and storage facilities with capacity of 6.9 million tons of LNG per year.
The project’s output is likely to be consigned to four of its major customers – China Petroleum and Chemical Corp. (Sinopec) (SNP), Tokyo Electric Power Co. Inc. (TEPCO), Osaka Gas Co. Ltd., and CPC Corp. Taiwan.
Apart from ExxonMobil PNG Limited, other co-venturers comprise Oil Search Limited, National Petroleum Company of PNG, Santos Ltd., JX Nippon Oil & Gas Exploration Corp., Mineral Resources Development Company (representing landowners) and Petromin PNG Holdings Limited.
ExxonMobil continues to evaluate new expansion and development opportunities in Papua New Guinea and exploit the same.
At present, ExxonMobil carries a Zacks Rank #3 (Hold). Some better-ranked oil and gas stocks that look promising include Encana Corp (ECA) and Matrix Service Company (MTRX). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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