Kumul supports new gas dream Kumul is keen to support...

Kumul supports new gas dream

Kumul is keen to support development of the proposed Western Pipeline, which would unlock stranded fields such as Stanley, Ketu-Elevala, Douglas and Puk Puk, opening up further exploration in the west and allowing development of significant liquids resources.

Australia's Horizon Oil is a big supporter of Kumul's pipeline planning efforts, but is also looking to a southern pipeline option to support a modest 1.4 million tonne per annum LNG plant on Daru Island.

Sonk's backing of an LNG expansion came as Kumul signed strategic agreements with LNG Japan and Sojitz on the fringes of a major oil and gas summit in Port Moresby last week.

The aim of the heads of agreement with LNG Japan is to accelerate sales of LNG from PNG LNG, allowing Kumul to directly enter the trading market.

"The heads of agreement will allow the companies to start working on the joint venture going forward with the PNG LNG project to take advantage of some of the spot market," Sonk said.

"The long term contracts are fixed, but there is opportunity in taking up some of the spot market cargoes and selling them to Japan and other markets around the world."

A recent reserves upgrade for the PNG LNG gas fields means more gas can be sold under contract.

The memorandum of understanding with Metal One Corporation is aimed at supporting the Western Pipeline from the Western province to Port Moresby.

Metal One is envisaged to provide the steel and financing for the proposed pipeline.

Energy minister Nixon Duban told the summit that the attraction of the Japanese firms was a vote of confidence in PNG's government.

"For them to allow themselves to be part of Kumul in this very important joint venture arrangement shows confidence in our government and confidence in our resources that we have that we can also supply the energy market in the world," he said.

"We have, in couple of the big conferences around the world, marketed PNG as an investment destination.

"While there are critics who are downplaying our ability as a nation, while people are criticising the government, you can see the kind of work that's attracting interest from the international community."

PNG is keen to increase ties with Asia, which sits right on its doorstep.

Previous governments have also talked with Sojitz about the potential for a petrochemical industry in PNG.

Several years ago Mitsubishi Corporation, Marubeni and Itochu have also suggested they could invest in the nation, and Sojitz had gone as far as securing a 20 hectare site.

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