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300th PNG LNG shipment leaves

THE 300th cargo of liquefied natural gas from the PNG LNG project has left our shores – almost three years to the date of the first shipment.
A spokesperson for the operator ExxonMobil PNG Ltd confirmed that 300 cargoes from the US$19billion (K59.9billion) project had now left our shores. The first shipment left on May 25, 2014.
According to ExxonMobil, the operations last year produced 7.9 million tonnes of LNG – an increase of 14 per cent from the original design specification of 6.9 million tonnes per annum (mta).
Over the next 30 years, it is estimated that the project will produce more than 11 trillion cubic feet of LNG. The estimated value of each LNG shipment was said to be between US$48million (K151.4million) and US$50million (K157.7million).
Kumul Petroleum Holdings Limited manages 16.6 per cent equity in the project for the State and the people.
KPHL managing director Wapu Sonk had told The National that the question of how much revenue we earned per shipment was not easy to answer because every shipment was different.
He said there were various variables mainly because the LNG sales contracts were different with different buyers.
“Some are delivery ex-ship (DES), some are free on board (FOB) and they fetch different prices,” he said.
“The volumes we sell on the spot market also fetches different prices depending on what the world price market is on the day of the trade.
“What has been fixed for PNG LNG project is the price formula which is used to calculate the LNG price with our long-term buyers.
“Each long-term buyer also fixed the volume they want to receive as DES and FOB. The variable in the formula is oil price.
“So at the end of the day, the biggest impact on revenue we generate is determined by movement of oil price as our long-term LNG sales contracts have been fixed to a formula that is linked to oil price which is usually known as the JCC-linked LNG price.”
JCC is the Japanese customs-cleared crude, a commonly used index for long-term LNG contracts. The National

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