Regional LNG: PNG Govt okays InterOil?s LNG project

Australian firm InterOil Corporation on Wednesday announced that the PNG National Government has signed the Company's Project Agreement for the construction of a liquefied natural gas (LNG) plant in Papua New Guinea.

The Agreement sets fiscal terms for a twenty year period, which include a 30% company tax rate and certain exemptions applicable to large scale projects of this nature. It also provides for a 20.5% ownership stake to be held by the Government of Papua New Guinea's nominee, Petromin PNG Holdings Limited. A further 2% ownership stake will be taken by landowners directly affected by the plant.

The proposed LNG project would be developed by InterOil and its joint venture partners Pacific LNG Operations Ltd. and Petromin PNG Holdings Limited. The project targets a $5 to $7 billion LNG facility, with multiple trains.

Additionally, the Agreement provides for the expansion of the plant up to 10.6 million tons per annum (mmtpa). While current plans call for first production of LNG towards the end of 2014 or beginning of 2015, InterOil is progressing a proposed liquids stripping plant, to be located in Gulf Province, in late 2011/early 2012, which would provide an attractive revenue stream prior to the commissioning of the LNG plant. (alex)