Photo Credit: Twinza Oil
According to Petroleum Minister Kerenga Kua, the first cargo of the liquefied petroleum gas (LPG) from the US$1.6 billion (K5.5 billion) Pasca A project in the Gulf is expected to start in 2025.
It will be the country's first offshore extractive resource project with infrastructure, located 95 kilometres offshore in seas 93 meters deep in the Gulf of Papua.
Pasca A, according to Kua, is a modest gas condensate project in terms of reserves.
The offshore production facilities, on the other hand, have the ability to combine tiny pockets of stranded gas deposits in the Gulf of Papua.
“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 estimated to take two years to complete and generate between 32 and 38 million barrels of LPG and condensates.
In the third year of the project's manufacturing life, Phase Two will commence.
During the project's ten-year lifespan, an estimated 330 to 400 billion cubic feet of gas (BCF) would be generated.
Twinza Oil (PNG) Ltd, the operator, is concentrating on commercializing its "found but underdeveloped assets." Twinza Oil Ltd has a business relationship with Baker Hughes General Electric (BIIGE), which offers vendor finance for the company's drilling projects.
Kua said in a statement that negotiations on the project began during the application stage for a petroleum development license in 2018.
In 2020, the Cabinet established the State Negotiating Team (SNT) for the Pasca A project to negotiate a fair agreement for the state.
“Last September, the Pasca A SNT and Twinza Oil Ltd initiated the term sheet for a Gas Agreement,” Kua said.
“However, there were some misunderstandings on the financial analysis method used and the 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 the base case of 2 per cent (equal to Papua LNG Gas Agreement) from the Loloata initialled 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.”
Reference:
Kero, Gynnie. The National (28 May 2021). “First gas shipment in ‘25”.
