Friday, March 9, 2018

ExxonMobil remains mum on ‘force majeure’

Operator of the US$19 billion PNG LNG project Exxonmobil remains tight-lipped about the nature of its suspension of operations opting not to declare a “force majeure.”
The company announced last week it had suspended operations for two months in order to assess condition and status of all related facilities.
Replying to queries from the Post-Courier yesterday, a company spokesperson would not delve into the reasons why it cannot be explicitly declared force majeure citing commercial confidentiality reasons.
“We are continuing to work with our customers to minimise the impact on their business,” the official said.
“We are unable to discuss commercial arrangements covered by confidential agreements.”
This was the same response given to international media organisation Reuters, who was told by ExxonMobil earlier that the plant’s two LNG trains would be shut for at least seven days.
Asian LNG market sources told Reuters there are concerns about a possible extended shutdown, which could affect not only the project’s four main buyers but also other buyers in Asia.
Uncertainty around production from PNG has drained liquidity from Asia’s spot LNG markets with buyers and sellers taking a wait-and-see approach before committing to trade, a market source told Reuters.
This is reflected in the wide bid-offer spread on the forward-month contract for April, he added.
The PNG LNG project is considered one of the world’s best-performing LNG operations.
ExxonMobil said earlier this month that together with its partners, France’s Total SA and Australia’s Oil Search Ltd, it plans to almost double the facility’s export capacity to 16 million tons per year.
PNG LNG’s long-term buyers are top global LNG buyer JERA, Osaka Gas, Taiwan’s CPC (CHIP.UL) and China’s Sinopec (SASADZ.UL).
JERA is a fuel joint venture between Tokyo Electric Power and Chubu Electric Power. Post Courier

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