PNG Petroleum minister confident of LNG direction

Transcript

Papua New Guinea's Liquefied Natural Gas (LNG) industry has a promising future despite the ongoing gloom around global commodity prices, according to the Minister for Petroleum and Energy.

Ben Micah has been talking up the high quality of PNG gas at a recent LNG Asia conference in Singapore, and in Japan where he talked with potential customers for the Papua LNG Project.

That project has yet to commence production, but Mr Micah is confident the project will be delivering gas by the time the current glut of supply on the world LNG market evens out, which he expects to happen in the coming few years.

The minister has told PNG media that the government is not going to sit around and wait for the prices to go up, but will deliver another three trains of gas.

Mr Micah spoke to Johnny Blades who asked him if he expected a third train to be developed in the Exxon Mobil-led LNG Project which has been exporting gas since 2014.

BEN MICAH: Yes we will be making some announcements about the next train in the PNG LNG Project. And the next major project, led by super major Total SA of France, will be coming on stream, before the end of this year, we will be making some major announcements.

JOHNNY BLADES: Right, so that's the one in the Gulf?

BM: That's the one in the Gulf, Elk Antelope.

JB: And is that going to be the same size as Exxon Mobile LNG Project, roughly?

BM: Yes, maybe another two trains.

JB: And will it use some of the existing facilities of the LNG Project?

BM: We are looking at how we can rationalise some of the infrastructure, given the tough economic situation that has befallen the oil and gas business.

JB: The LNG price is linked to oil, isn't it. Does that make it problematic with going forward?

BM: Yes, yes, yes... We see an increasing price in the next few years. Less than three... two to three years from now the price will start stabilising. Maybe around 50 or 60 dollars a barrell, and supply and demand will begin to balance out and then trading will begin to normalise for both producing countries and the buyers.  

JB: Because there is over-supply at the moment, isn't there, in the world market?

BM: Over-supply at the moment. American shale gas and.. you know, Australia, even the Arabs, Qatar, Saudi Arabia, the Gulf states, and now also with Iran opening up because sanctions have been lifted, we'll see a lot of oil and gas being forwarded into the markets but, like I said, the population of the world continues to increase, people continue to move to the cities, and the demand for energy will continue to rise, so it will even out two or three years from now.