TotalEnergies, ExxonMobil, Santos launch Papua LNG FEED

Operator TotalEnergies and its partners ExxonMobil and Santos have launched fully-integrated front-end engineering and design (FEED) for the Papua LNG project in Papua New Guinea.

TotalEnergies has a 40.1 percent operating stake in the LNG export project, ExxonMobil has 37.1 percent, and Santos owns a 22.8 percent interest.

In July last year, the Papua LNG joint venture launched the first phase of front-end engineering and design (FEED) studies for the LNG project’s upstream production facilities.

After that, Technip Energies, leader of a consortium with Australia’s Clough, won a contract to perform the front-end engineering design (FEED) for the project’s upstream production facilities.

The upstream production facilities cover the development of the Elk and Antelope onshore gas fields including the well pads and the central processing facility.

It also incorporates a carbon capture and sequestration (CCS) scheme to remove the fields’ native CO2 and reinject it into the reservoirs.

First production by end of 2027 or early 2028

Australia’s Santos announced the launch of fully-integrated FEED in a statement on Tuesday.

Papua LNG would have liquefaction capacity of up to six million tonnes of LNG per year with first production expected by the end of 2027 or early 2028, it said.

Following pre-FEED studies, the Papua LNG partners have selected a concept using four electric LNG trains (e-trains) with a combined capacity of four million tonnes per annum, Santos said.

The partners will build the trains within the existing PNG LNG terminal in Caution Bay, operated by ExxonMobil.

Also, selecting e-trains and re-injection of reservoir CO2 will reduce the carbon intensity of the project, the firm said.

Papua LNG has also secured access to up to two million tonnes of existing liquefaction capacity from PNG LNG.

Integrating the Papua LNG midstream development within PNG LNG maximizes the value of both projects and delivers increased capital efficiency by reducing upfront capital expenditure and maximizing integration synergies, Santos said.

PNG LNG will receive an access fee, pro-rata opex sharing and ongoing processing toll revenue that compensates PNG LNG for making the capacity available.

FID

The partners expect that the selected concept for Papua LNG would have a lower capital expenditure outcome than the previous concept.

Costs will be refined during the FEED phase and the project participants intend to explore project finance opportunities for a portion of the project cost, Santos said.

Santos said that the government of Papua New Guinea may exercise a back-in right for up to a 22.5 percent interest in the LNG project at the final investment decision.

Should PNG exercise its full back-in right, Santos’ interest in the project would reduce to 17.7 percent.

Santos also has a 42.5 percent interest in PNG LNG and announced a conditional agreement to sell a five per cent interest in PNG LNG to Kumul Petroleum.

ExxonMobil holds a 33.2 percent operating interest in PNG LNG.

The Papua LNG partners plan to take FID by the end of 2023 or early 2024, according to the firm.

TotalEnergies sells Papua LNG stake

According to a separate statement by TotalEnergies issued later on Tuesday, the firm signed a head of agreement with JX Nippon to sell a 2 percent interest (post Kumul back-in right) in Papua LNG.

JX Nippon is an affiliate of Eneos and already holds a 4.7 percent interest in PNG LNG.

TotalEnergies also said that the construction and operation of the Papua LNG electrical liquefaction trains will be delegated to ExxonMobil.

(Article updated with a statement by TotalEnergies.)

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