THE first shipment of liquefied petroleum gas (LPG) from the US$1.6 billion (K5.5 billion) Pasca A project in PNG's Gulf is expected in 2025, says PNG Petroleum Minister Kerenga Kua.
It will be the country’s first offshore extractive resource project with infrastructure in the Gulf of Papua, about 95kms offshore in waters 93 metres deep.
Kua said Pasca A was a small gas condensate project in terms of reserves size.
But with the offshore production facilities, its potential to aggregate small pockets of stranded gas fields in the Gulf of Papua is huge.
“The project will evolve in a two-phased development plan.
“In Phase One, rich liquids will be stripped and produced, namely liquid petroleum gas (LPG) and condensate while gas is re-injected.
“In Phase Two, gas will be produced.”
Phase One is expected to have a two-year timeframe where around 32 and 38 million barrels of LPG and condensates will be produced.
Phase Two will begin in the third year of the production life of the project.
An estimated 330 to 400 billion cubic feet of gas (BCF) will be produced for the 10 years of the project life.
Operator Twinza Oil (PNG) Ltd is focused on commercialising its “discovered but as yet undeveloped assets”. It is in a commercial partnership with Baker Hughes General Electric (BIIGE) which provides vendor financing on Twinza Oil Ltd’s drilling programmes.
In a statement this week, Kua said discussions on the development started during the application for a petroleum development license stages in 2018.
Cabinet set up the State Negotiating Team (SNT) for the Pasca A project in 2020 to negotiate an acceptable deal for the State.
“Last September, the Pasca A SNT and Twinza Oil Ltd initialed the term-sheet for a Gas Agreement,” Kua said.
“However, there were some misunderstandings on the financial analysis method used and a domicile status of the company.
“These have been resolved through the SNT negotiations and offline discussions with Twinza.
“In negotiating resource projects deals for the country, the State has taken an approach to tax from production rather than profits.
“The Pasca A SNT has so far negotiated the production levy from base case of 2 per cent (equal to Papua LNG Gas Agreement) from the Loloata initialed term sheet of last September, up to 4 per cent in April.
“At a 5 per cent production levy that State would have reached 55 per cent state take on nominal cash flow analysis, which is what we want to achieve.”
The National / Pacific Mining Wacth
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