Global giants Total SA and Exxon Mobil Corporation (NYSE:XOM) have reached agreement on plans to increase gas exports from Papua New Guinea. It should be noted that Papua New Guinea is the companies partner Oil Search Ltd.

The buzz

The plan to increase the ExxonMobil-managed Papua New Guinea LNG plant to nearly sixteen million tonnes per annum would see it compete Australia’s biggest LNG assignments, at a cost of nearly $13 billion. Oil Search stated that the firms intend to launch three fresh LNG units/trains, with two supported by gas from the Elk-Antelope areas, run by Total SA, and one underpinned by current fields and the new P’nyang area, managed by Exxon.

After the firm posted a near threefold increase in annual core profit, Managing Director Peter Botten expressed that there’s no uncertainty that keeping it simple is one of the remarkable benefits of the concept that is currently on the table. It also enables a smart way of both financing and marketing gas. The partners intend to start design and engineering work in the second half of 2018, but first need to come in agreement with the PNG government. These comprise domestic gas supply needs, landowner and local content agreements.

The firms also need to finalize on phasing the timing of and cost-sharing on their gas field developments. Saul Kavonic of Wood Mackenzie expressed that deal alignment challenges exists, and shouldn’t be underrated. Botten was confident Total and ExxonMobil are committed to the assignment, which is targeting for a final investment decision in imminent year.

He added that he knows they all possess other interests across the world. However, in no way do he see any blinking or any unwillingness to move these assignments forward. They’re interesting, economic solid projects. The expansion is anticipated to be quite cheaper as compared to the initial cost of advancing the PNG LNG plant.