PNG LNG Signs Sales Deal with BP

The Papua New Guinea LNG project co-venturers have entered into a mid-term LNG sales and purchase agreement (SPA) with BP Singapore with supply due to start this month, Oil Search said August 17.

“We are pleased to announce this LNG SPA with BP, which broadens the customer base for LNG from PNG LNG. The BP SPA takes the total contracted volumes from the Project to approximately 7.5 million metric tons, following the announcement in July of the mid-term sale to PetroChina, together with 6.6mn mt per year committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC,” Oil Search’s managing director Peter Botten said.

The deal is for the supply of about 0.45mn mt of LNG per year over an initial three-year period before rising to around 0.9mn mt per year over the following two years, Oil Search said.

“ExxonMobil, on behalf of the PNG LNG Project participants, is in negotiations with several other parties for the final mid-term trance of up to 0.45mn mt per year. An agreement is expected to be concluded in the near-term and will increase total sales under new mid-term agreements to 1.3mn mt per year,” Botten added.

PNG LNG is operated by ExxonMobil (33.2%), with Santos (13.5%), National Petroleum Company of PNG (16.8%), JX Nippon Oil and Gas Exploration Company (4.7%), Mineral Resources Development (2.8%), and Oil Search (29%) holding interests in the project.