Regional LNG: EWC to build PNG LNG plant

Australia-listed energy firm Energy World Corporation Limited (EWC) announced on Wednesday it has signed a Project Funding and Construction Agreement (PFCA) and a Shareholders Agreement with InterOil Corporation and Liquid Niugini Gas Ltd., to construct a 3 MTPA land-based LNG plant in the Gulf Province of Papua New Guinea (PNG), which will be developed in two phases using EWC?s modular 500,000tpa LNG trains.

Phase one will have a total capacity of 2 MTPA, and phase two a further 1 MTPA expansion will follow immediately thereafter, the company said.

The agreements follow EWC?s September 2010 announcement on the formation of the partnership with InterOil Corporation and Liquid Niuqini Gas Ltd.

The Train 1 LNG plant will process an estimated 2.25 TCF of gas over 15 years. In return for its commitment to fully fund the plant, the agreements provide that EWC is entitled to a fee of 14.5% of the proceeds from the sale of LNG from the plant, less agreed deductions, and subject to adjustments based on timing and execution.

The Train I LNG project with InterOil Corporation and Liquid Niugini Gas Ltd., for the development of a modular LNG plant, is designed to take gas from the proposed condensate stripping plant (CSP) being pursued by InterOil corporation in joint venture with Mitsui and accelerate the intended monetization of the Elk and Antelope resource, while eliminating the need for gas re-injection. The agreements provide a framework for the possible expansion of the plant?s capacity to 8 MTPA of LNG, it said.

The PFCA and Shareholder Agreements with InterOil Corporation and Liquid Niugini Gas Ltd. are conditional upon reaching FID no later than 31 December 2011. However, as previously disclosed the current joint venture project schedule is for FID to occur simultaneously for the LNG plant and CSP by June 30, 2011 and combined plant start-up approximately 30 months after FID.(alex)