InterOil Corporation, which explores, appraises and develops crude oil and natural gas, has received approval from National Executive Council, or NEC, of Papua New Guinea for InterOil's LNG development project in the Gulf Province.
The decision clears the way to proceed with plans for an LNG plant in the Gulf Province with initial output of a minimum of 3.8 million tons per annum. As the Prime Minister Peter O'Neill announced, the decision also approves the acquisition by the State of an additional 27.5% equity interest in the Elk/Antelope gas fields, over and above the 22.5% interest to which it is entitled under the Oil & Gas Act, on terms to be negotiated with InterOil.
InterOil understands that the State intends to take its entitlement to gas from the project in kind, to be used in part in domestic power generation and natural gas related industries thereby providing a boost to PNG's growth and prosperity. InterOil is pleased to be able to provide this opportunity to the State.
The NEC also includes as a condition of its approval an agreement with regard to an internationally recognized operator of the facilities. Given the importance of the LNG project, the PNG Cabinet also approved the establishment of the Ministerial Gas Committee comprised of economic ministers to fast track commercialization of the county's second LNG project.
Now that the Government's position has been clarified, InterOil anticipates being able to conclude an agreement for a sale of an interest in the Elk and Antelope resource in Petroleum Retention License 15 and the first 3.8 million tons per annum Gulf LNG Train to a partner or partners in the coming weeks. Major oil companies, national oil companies, and Asian utilities have been actively engaged in the process.