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ExxonMobil and Papua New Guinea should return to LNG negotiating table

February 11/2020

MOSCOW (MRC) -- Exxon Mobil Corp and the Papua New Guinea government must return to the negotiating table so that a USD13 billion expansion of gas production can proceed, reported Reuters with reference to the head of French oil major Total, a partner in the plan.

The plan, which would double liquefied natural gas (LNG) exports from the South Pacific nation, hinges on agreements to develop two new gas fields, but PNG walked away from talks with Exxon on one of those fields last week.

The other agreement, with Total, was sealed last September. It is intended that gas from the two fields would be processed at an expansion of the existing Exxon-operated PNG LNG plant in Port Moresby.

"Our project is joint with that of Exxon," Total CEO Patrick Pouyanne told reporters after Total reported full-year results on Thursday. There is a need for an agreement and the PNG government is aware of that.

"We have an agreement; they need to find an agreement. All of that needs negotiation, I dont think negotiations should be done through media."

LNG expansion is crucial for the impoverished nation, but the government has said that Exxon refused to budge on the financial terms for the Pnyang field and failed to come up with an offer it could accept.

Exxon has expressed disappointment at the breakdown of talks but has said it hopes to work towards an outcome that would be beneficial to all stakeholders.

The companys press representative in PNG and the Prime Ministers office had no immediate response to Pouyannes comments when contacted outside business hours on Thursday.

"Fundamentally, the two projects are good. Fundamentally, PNG wants the projects to go ahead, now it is a question of negotiation," Pouyanne added.

"Im convinced theyll reach an agreement. It is a question of patience."

Total beat profit forecasts on Thursday by keeping net adjusted profit for the fourth quarter steady at USD3.2 billion, lifting shares in the French energy major.

As MRC wrote previously, in late September 2019, ExxonMobil Corp shut its 369,024 barrel-per-day (bpd) crude oil refinery in Beaumont, Texas because of flooding from Tropical Storm Imelda. The company also operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene (LLDPE) plant with a capacity of 727,000 tonnes per year in Beaumont.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, PP, PE, PP random copolymer, propylene, ethylene, gas processing, petrochemistry, Exxon Mobil, Total Petrochemicals, Papua New Guinea, Russia, USA.
Category:General News
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