Name of the Project
PNG LNG project.

Location
Papua New Guinea (PNG).

Project Owner/s
Total, ExxonMobil and Oil Search.

The companies have agreed to fund government’s equity stake in the project until a final investment decision is made.

Project Description
The project involves the development of the Elk and Antelope gasfields to feed two new production units, or trains, to be built at the PNG LNG plant run by ExxonMobil.

The 5.4-million-ton-a-year-capacity project will comprise two liquefied natural gas, or LNG, trains, each with a capacity of 2.7-million tonnes a year, and will unlock more than one-billion barrels of oil-equivalent natural gas resources. The gas production will be operated by Total, and the LNG plant will be developed in synergy with the ExxonMobil-operated PNG LNG project through an expansion of the existing plant in Caution Bay.

Potential Job Creation
Not stated.

Capital Expenditure
$13-billion.

Planned Start/End Date
First production is targeted for 2024.

Latest Developments
The PNG LNG project owners have been cleared to continue with the project after the PNG government endorsed the gas agreement signed with the previous government.

The PNG government created some uncertainty at the end of August after Minister for Petroleum Kerenga Kua sent a delegation to Singapore seeking to renegotiate the terms of the PNG LNG agreement, which was signed in April this year.

The review of the LNG agreement has now been completed, with additional gains negotiated for PNG.

Project operator Total has delivered a letter to the PNG government, promising a national-content plan, which is expected to provide positive opportunities for local suppliers.

In its letter, Total also addresses third-party access to the PNG LNG petroleum pipeline, saying that if requested by third parties, the PNG LNG partners will engage in negotiations to allow for access by the third party on "mutually acceptable terms".

Further, Total has agreed that once all the PNG LNG loans have been repaid, and past costs have been reimbursed, the state government will be given the option to engage in negotiations for ownership of the petroleum pipeline, noting, however, that the state will be required to recognise the "fair value" of the investment in considering an acquisition of the pipeline.

Additionally, the letter also addresses future shipping ownership by the state government.

Kua has noted, however, that the review demonstrated that the current concession-based licensing system had failed PNG in the mining and petroleum industries.

The Ministers for Mining and Petroleum have now been instructed to rewrite laws to progress to a system based on production arrangements, which is expected to relieve the State of expensive loans and create early free cash-flows in all future mining and petroleum projects.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Total media relations, tel +33 1 47 44 46 99 or email presse@total.com; or investor relations tel +44 207 719 7962 or email ir@total.com.