Western LNG ramps up

Western LNG ramping up
HORIZON Oil is ramping up its Western LNG branding to gain Papua New Guinea government support now that the gas aggregation project is in the swing of pre-front end engineering and design.
These include a 30% stake in and operatorship of PRL 28 (Ubuntu), next to PRL 21 (the Elevala-Ketu-Tingu fields), in which Horizon also secured an extra 3.15% after Mitsubishi Corporation divested its upstream assets in PNG.
Horizon swapped a 20% stake in PRL 28 for a 20% interest in PRL 40 which contains the Puk Puk and Douglas gas-condensate fields in a deal with Kumul Petroleum Holdings.
This dealing left Horizon with a 28% material interest in the aggregate gas-condensate resource to supply WLNG and operatorship of the core Elevala/Tingu and Ketu fields, allowing it to move the project into pre-FEED stage, which the company announced at SEAAOC in Darwin earlier this month.
The next key step is to secure formal government support for the project to the next stage, with various approvals from the Department of Petroleum and Energy and the Treasury pending, along with environmental approvals.
WLNG brings together the upstream processing facilities, the gas and condensate export pipelines to Daru Island and a nearby modular liquefaction facility.
"It's important that the government does support what we're trying to do, and they will do that if they believe the financial and social benefits that accrue to the state are worthwhile, and we believe those benefits to the landholders, the province and PNG government are substantial," Horizon managing director Brent Emmett told Energy News.
"We need to ensure that the basic elements are well understood by everybody, and that everyone is aware of the very clear benefits that will accrue.
"We're now at the stage where we can confidently elevate the profile of the project with the new Western LNG logo launched this week."
While the logo was on the back page of Horizon's presentation at SEAAOC, it was at the front of yesterday's presentation attached to the 2016-17 results, reflecting that Horizon is now ramping up awareness of WLNG.
The next phase in that campaign is a devoted website, to be unveiled soon.
Emmett said the government members have given the project a positive reception so far, and he expects Peter O'Neill's new government to continue the pro-development policies seen in the Prime Minister's first term.
Financials
Horizon appears well placed to progress its WLNG plans, with oil sales volumes 3% higher last year generating US$6.5 million (A$8.2 million) in revenue.
The company cut its net debt from $131.9 million to $108.5 million, with its producing fields in China and New Zealand continuing to generate strong cash flows.
Overall, Horizon achieved free cashflow breakeven costs of $32/bbl over the period.
Horizon also managed to push average cash operating costs down 21% to US$11/bbl of oil sold due to cost savings from lower oil prices and a reduction in tariffs applying to China's Beibu Gulf production, where operating costs were $7.54/bbl.
Good progress was also made on development planning for the WZ 12-8E expansion project in the Beibu Gulf, with relatively low-cost workover programs, infill drilling and incremental field development being considered.