PERTH (miningweekly.com) – Australian oil and gas major Santos has struck a $187-million deal to acquire a 14.3% interest in the petroleum retention licence 3 (PRL 3), which contains the P’nyang natural gas field in Papua New Guinea (PNG).
The P’nyang gas field forms part of the plans to expand the PNG liquefied natural gas (LNG) project.
Under the binding letter of intent, Santos would acquire the 14.3% interest in PRL 3 from the existing PRL 3 participants for $187-million, with $120-million of this sum payable on the execution of a fully-term sales and purchase agreement, which is expected at the end of June.
The balance of the payment will be subject to the award of a production development licence to replace PRL 3, and a final investment decision for the construction of an additional LNG train at the PNG LNG plant site for the liquefaction of gas from the P’nyang field.
Santos MD and CEO Kevin Gallagher said on Thursday that Santos’ strategy at PNG was to work with its partners to align interest and support and participate in backfill and expansion opportunities for the PNG LNG project.
He added that the PRL 3 arrangement marked an important step towards the proposed expansion of the PNG LNG plant through a 2.7-million-tonne-a-year third LNG train fed by existing project resources and P’nyang.
“We are very pleased to execute this letter of intent with the PRL 3 participants who are also affiliates of Santos’ partners in the PNG LNG project. We look forward to working with the PNG government, our partners and landowners to make expansion at PNG LNG a reality,” Gallagher said.
Santos holds a 13.5% interest in the PNG LNG project, which currently has an eight-million-tonne-a-year production capacity.