PNG set to double crude exports

ExxonMobil's $19 billion PNG liquefied natural gas (PNG LNG)02 April 2014, News Wires – Oil liquids from ExxonMobil’s gas export project in Papua New Guinea will be blended into the country’s only crude blend, almost doubling crude exports by the middle of the year, the company said.

ExxonMobil’s $19 billion PNG liquefied natural gas (PNG LNG) project is due to begin exports of 6.9 million tonnes of LNG per year around mid-2014.

Along with LNG, the project will produce about 25,000 barrels per day of condensate, a low-density mixture of hydrocarbon liquids that will be blended into Papua New Guinea’s existing export stream, the Kutubu Blend, a spokeswoman for the project told Reuters.

The additional volumes will result in an almost doubling in production of the Kutubu Blend, Papua New Guinea’s only export grade made up of the Kutubu, Gobe, Moran and SE Mananda crude streams, which currently stands at around 30,000 bpd, Reuters reported.

Kutubu is normally sold in cargoes of 650,000 barrels with one-to-two cargoes per month exported to regional refiners. Exports will rise to two-to-three monthly cargoes by the middle of the year. The first cargo of the new blended Kutubu crude will be marketed by project partner Oil Search, the spokeswoman told the news agency.

As a result of condensate in the mix, the new Kutubu Blend will become lighter with an API of about 49 compared to 44-45 now, an industry source said.

The higher crude exports from impoverished Papua New Guinea come amid stagnating crude production in a region that is increasingly dependent on crude imports.

Asian refiners import more than twice the volume of crude produced regionally, and Asia is estimated to need an additional 300,000 bpd of low-sulphur or sweet crudes in 2014 compared with last year, according to Reuters.

A total of 200 million barrels of associated liquids are expected to be produced over the LNG project’s 30 year life, Oil Search said on its website.

Other shareholders in the PNG LNG Project include Australia’s Santos and Japan’s JX Nippon Oil & Energy.

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