Petromin congratulates InterOil and Mitsui Corporation

THE Managing Director and CEO of Papua New Guinea’s national, oil, gas and minerals company Petromin PNG Holdings Limited(Petromin), Joshua Kalinoe has congratulated InterOil and Mitsui Corporation for entering into a Preliminary Commitment Agreement for developing phase one of the Elk/Antelope LNG project, subject to final ratifications.

Phase one of the project includes the extraction of condensate and development of upstream LNG extraction facilities.

Mr. Kalinoe made these remarks on the occasion of the signing ceremony in Tokyo of the Commitment Agreement between InterOil and Mitsui in front of the Prime Minister, Grand Chief Sir Michael Somare on Tuesday 30th March, 2010.

InterOil is the upstream operator for the Elk/Antelope LNG project and Mitsui Corporation is one of the leading Japanese investment and trading companies.

The Preliminary Commitment Agreement allows Mitsui to fund 100 percent cost of the Condensate Stripping Facilities (CSF) which includes a liquid separation plant and pipeline in the project area, and earn tolling fees and various other benefits. Mr. Kalinoe said, under the arrangement Mitsui will also fund Petromin's share of the condensate extraction costs. This means that Petromin and the State will not have to seek separate financing arrangements to fund their share of the equity.

Mr. Kalinoe said that it is one of the best project financing deals for the current partners in the project which includes Petromin, InterOil and Pacific LNG. It also means that early revenue for Petromin and the State from the Condensate Stripping component of Elk/Antelope LNG project where first cargo of condensate is expected by the second half of 2012.

Under the arrangements Mitsui will co-build the extraction facilities and will receive toll fee as well as financing cost from condensate revenue at first production of condensate. The condensate will be sold on a net back basis to the InterOil refinery in Port Moresby at international market and local PNG market prices. 

Mr. Kalinoe said this arrangement adds more value to Papua New Guinea than any other projects where all the LNG products are sold overseas.

Meanwhile, Petromin has entered into a long-term strategic partnership arrangement with Japan Petroleum Exploration Co., Ltd (Japex).

Japex is a publicly listed company and partly owned by the Japanese Government. It is the exploration and Development Company with oil and LNG interests in Japan and other parts of the world.

The Agreement on Principles for a Long-term Strategic Partnership was signed in Tokyo on Tuesday 30th March, 2010 in the presence of the Prime Minister, Grand Chief Sir Michael Somare by the President of Japex, Mr Osamu Watanabe and Managing Director of Petromin, Mr. Joshua Kalinoe.

In the signing ceremony, Mr. Kalinoe said the purpose and intent of the Agreement is significant for Petromin because of the value it will bring to the development efforts of the company in both operational and human resource development.