China Moots Building Gas Plant in Papua New Guinea

Text of report in English by Papua New Guinea newspaper The National website on 7 December

Petroleum and Energy Minister Sir Moi Avei said yesterday a Chinese company, China National Petroleum Corp, may build a liquefied natural gas plant in the country to cater for the energy needs of China, now the fastest-growing oil market.

Sir Moi said he may sign an initial accord with China’s biggest oil producer to develop natural gas reserves and construct an LNG plant during a visit to the country early next year.

“China is a major LNG market… [ellipsis as published] I have had Chinese interests knocking on my door,” Sir Moi told reporters during the Australia and PNG gas conference in Brisbane, organized by the Australian Journal of Mining. LNG buyers in India, South Korea and Japan had also expressed interest in buying gas from Papua New Guinea, he said.

China National Petroleum’s Beijing-based spokesman Liu Weijiang declined to comment when reached on his cellphone yesterday, according to Bloomberg Media.

The project would revive a now-defunct BP plc-led proposal in 1998 to pipe gas from the Hides gas field in the Southern Highlands northwards to Wewak, the minister said. That proposal was for a single 4.5m-tonnes-a-year LNG plant for export to Asian buyers.

“PNG is on the doorstep of the biggest gas markets in Asia: China, South Korea, Japan,” Sir Moi said earlier in an address to the conference. “PNG is well placed in the global market-place to sell its resources.”

The potential China National Petroleum project would follow the 3.5bn Australian dollars (8.5bn kina) plan to build a pipeline to take gas southwards to eastern Australia. Gas deliveries are due to start from that project in late 2009. That project would use about 5 trillion cubic feet of the about 12 trillion cubic feet of proven and probable gas reserves in PNG, said Peter Botten, managing director of Oil Search Ltd.