InterOil on the front foot

PETROLEUM and Energy Minister William Duma is under pressure to meet with InterOil executives as the upstream player is ready to announce the long-awaited outcome of its search for a world-class operator for the Gulf LNG project in Papua New Guinea. Duma frequently criticised the project for differing from the project agreement struck in late 2009. He especially sought a world-class LNG operator for the project and InterOil responded by appointing three investment banks to field bids from suitable candidates. The process has been ongoing since October. Most recently, InterOil took the unusual step of announcing it had received evidence from an “unofficial channel” that the Department of Petroleum and Energy aimed to cancel the government agreement with it over the project. Duma since denied that was the case but more importantly, Prime Minister Peter O’Neill went on the record saying any such decision would need to be a National Executive Council decision (involving key cabinet ministers). In comments aired by ABC Radio, O’Neill further emphasised the need to sustain the investment momentum in PNG by allowing the “second LNG” (Gulf LNG) project to progress to the development stage. In his interview with the radio station, InterOil corporate affairs manager Kevin Byrne indicated that Duma and DPE Secretary Rendle Rimua were holding back the announcement of the much vaunted deal which would bring in a new operator for Gulf LNG. “The process of acquiring that partner has been described to the department, it has been described to the minister and as I understand it, an announcement as to who that will be will be made public soon after a discussion with the department and the minister,” Byrne told ABC Radio. He further said InterOil looked forward to an opportunity to sit down with the DPE and work its way through any issues Rimua or Duma might have. Both Duma and Rimua have been strong supporters of bringing in Royal Dutch Shell as a suitable operator for the Gulf LNG project. With an election kicking off next month, there is also the possibility a breakthrough on the Gulf LNG project may help sway voters – especially in Gulf province. Rimua, often considered a right-hand man of Duma, was reappointed to his role in March for a four-year term. The appointment was made even though the National Fraud and Anti-Corruption agency reportedly slapped Rimua with corruption charges earlier that month over falsely claiming public funds totalling more than 249,500 kina ($A119,567). As of last year, the Gulf LNG project was targeting 5 million tonnes per annum in 2014, with 3Mtpa from an Energy World Corporation-designed onshore modular LNG plant in Gulf province and the rest from a floating LNG facility. There is also a proposed ramp-up aiming to hit up to 8Mtpa from the total project through 2015 and 2016. Back in 2009, the project was based on a 7.6-10.6Mtpa LNG plant near Port Moresby.