Oil Search says it has progressed plans with global giants ExxonMobil and Total for new facilities that could double production of liquefied natural gas in Papua New Guinea.
The three companies have reached broad agreement on a preferred development concept, which is likely to include the construction of three new LNG processing plants, or trains, with a total capacity of eight million tonnes a year.
Two of these trains would process gas for the Papua LNG project, from fields controlled by French energy group Total, while the third train would be supplied gas from ExxonMobil’s PNG LNG project and P’nyang fields.
Oil Search owns a 23 per cent stake in the Papua LNG project and the Elk-Antelope gas fields, and a 29 per cent interest in PNG LNG.
Oil Search managing director Peter Botten said the development concept facilitates each project’s capacity and infrastructure.
It would also allow Oil Search to reach into the lucrative north Asian market.
“The market is hungry for another seller into north-east Asia,” Mr Botten said.
The plans are to be presented to the PNG government and other joint venture partners, and if approved, a decision on the engineering and design phase is expected in the second half of 2018.
The announcement came as Oil Search delivered a net profit of $US302.1 million ($A381.9 million) for 2017, up from $US89.8 million in 2016.
The profit growth was driven by record levels of production, higher energy prices, and a significantly lower tax rate in PNG.
Oil Search expects production in 2018 to be similar to 2017 at between 28.5 and 305. million barrels of oil equivalent.
Operating costs are also forecast to be in line with 2017, while capital costs are expected to rise as activity on the company’s growth projects ramps up.
Oil Search shares dropped 5.5 cents, or 0.7 per cent, to $7.535.
OIL SEARCH’S PROFIT BOOSTED BY STRONGER PRICES
* Full-year net profit $US302.1m, up from $US89.8m
* Revenue up 17pct to $US1.45 billion
* Final dividend up 3 US cents to 5.5 US cents