AsianOil: P’nyang partners sign gas agreement with PNG government

The partners in the proposed P’nyang development have signed a deal with the government of Papua New Guinea (PNG) over the proposed development of the field.
Santos said on February 22 that it had signed the agreement along with ExxonMobil – the operator of P’nyang – and JX Nippon Oil & Gas Exploration. According to the company’s statement, the agreement “provides a clear framework” for the future development of the project. The deal reportedly sets out a fiscal framework, as well as supporting project scoping and evaluation.
Gas from P’nyang would be used to backfill the existing PNG LNG project, which is also operated by ExxonMobil. Santos noted that up to 5% of P’nyang’s gas output would be made available to the PNG government to support its electrification campaign in Western Province or another agreed location.
The announcement comes weeks after Santos completed its merger with Oil Search in December. As a result of the move, Santos has raised its stake in PNG LNG to 42.5% and also now owns a 22.8% interest in the proposed Papua LNG project, operated by TotalEnergies.
Development of P’nyang is proposed to begin after the Papua LNG project is brought online, which is currently targeted for 2027. Papua LNG was initially proposed as a twinned development with an expansion of PNG LNG. However, the PNG government demanded better terms for the country from both projects in 2020 and subsequent negotiations resulted in Papua LNG being decoupled from PNG LNG and advanced as a standalone development.