Papua New Guinea Government Analyzing Two LNG Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Papua New Guinea's multibillion-dollar liquefied natural gas (LNG) project is being managed by ExxonMobil (NYSE:XOM) (Irving, Texas), which plans to pipe gas from the country's highlands to a processing facility in the northwest of Port Moresby.

Meanwhile, Liquid Niugini Gas Limited (Cairns, Queensland), a subsidiary of InterOil Corporation (NYSE:IOC) (Cairns), has proposed a plant to be strategically located adjacent to the InterOil refinery at Napa Napa, Papua New Guinea. The project awaits the green light to begin taking bids for construction. In the first stage, the LNG Production plant will be producing 5 million meters tons per year and will be ready for a second train addition. The estimated cost is $5 billion.

Both projects are still in their preliminary phases, awaiting final investment decisions by the government. At the moment, it is known that although PNG authorities are studying InterOil's and ExxonMobil's projects, they will not be carried out at the same time.

ExxonMobil's Esso Highlands, a $15 billion LNG project in Paupa New Guinea, is expected to have a dual-train LNG production plant with a capacity of 6.2 million meters tons per year. Exxon is awaiting final approvals at the end of this year to begin construction of the plant. Completion date is set for 2013-14.

Despite the big cost, the project has a supply contract with China, the world's second-biggest energy user. China has agreed to buy LNG from ExxonMobil and is building more than 10 LNG terminals on the Eastern coast to double the use of fuel by 2010, and even duplicate terminal capacity between 2010 and 2015.

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