Twinza Oil, PNG agree terms for $2.4bn Pasca A project
Perth-based Twinza Oil agreed terms with Papua New Guinea (PNG)'s government for the $2.4bn development of the Pasca A gas and condensate field, local media reported on July 13.
The milestone comes after nine months of negotiations, which faced some delays as a result of the coronavirus pandemic. While the terms still need to be approved by PNG's national executive council, local media cited officials as saying a final agreement was expected by the end of the month.
Pasca A lies in the Gulf of Papua, some 95 km offshore. The project is expected to flow 200,000 metric tons/year of liquids, of which 55% is condensate and 45% LPG. A second phase will produce commercial gas.
Under the agreed terms, PNG will secure 55% of gross project income, assuming an average oil price of $50/barrel, but it may get more if the price is higher. The state's take includes a 2% royalty, a 5% production levy and a 2% development levy on gross revenues, as well as additional taxes on profit. PNG can also set aside up to 5% of production for the domestic market.
Twinza has a 77.5% participating interest in Pasca A while the government controls the remaining 22.5%.