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Liquid Niugini Gas selects Bechtel and ConocoPhillips Technology

News release - 28 February 2008

Liquid Niugini Gas has selected leading engineering, construction and project management company Bechtel to undertake the front-end engineering and design (FEED) and engineering procurement and contracting (EPC) work for its planned LNG facility in Papua New Guinea. Liquid Niugini Gas has also chosen ConocoPhillips’ Optimized CascadeSM Process Technology for the plant design.

Liquid Niugini Gas CEO, Dr Jack Hamilton, said Bechtel was a world-class LNG player with extensive experience in Papua New Guinea. “Bechtel clearly demonstrates the knowledge, capacity and ability to do the job and the Liquid Niugini Gas Project is very pleased to have them on board,” he said. “The combination of Bechtel’s execution experience, combined with the proven technology of ConocoPhillips will give us a world-class LNG outcome.”

“This is another important milestone for Liquid Niugini Gas and Papua New Guinea’s entry to the world LNG stage,” Dr Hamilton said.

Bechtel Oil, Gas & Chemicals global business unit President, Jim Jackson, said “Bechtel is pleased to support Liquid Niugini Gas with their LNG Project in Papua New Guinea. Our integrated Pipeline and LNG delivery capability will add significant value to this fast-track project development.”

The selection of ConocoPhillips technology comes on the back of the successful application of the process technology in ten LNG projects world-wide. ConocoPhillips Manager, LNG Technology and Licensing, Jim Rockwell, said, “We are excited about the selection of our proven, reliable technology and look forward to applying ConocoPhillips’ more than 40 years of experience with LNG to this project.”

Liquid Niugini Gas took an innovative approach toward the FEED process by concurrently negotiating an agreed EPC contract as an option.

“This shaves around 12 months from the traditional timeframe for such projects,” Dr Hamilton said. “It was designed to ensure that in an overheated market, we could secure the services of a leading global player and to meet our ambitious schedule for first gas delivery.”

The planned capacity of the LNG liquefaction plant, to be located at Napa Napa in Port Moresby, is a nominal 5 million tons per annum as a single processing train, with the option to add a second processing train.

Dr Hamilton explained that formal award of the FEED contract was subject to final shareholder approval, which requires the finalization of a Project Agreement with the Papua New Guinea Government.

“While the Project is still aggressively pursuing its 2012 schedule, this timeframe is under pressure until the Project Agreement with the Government is completed,” he said.

A Memorandum of Understanding was signed with the Government in October 2006 and negotiations are progressing on the final agreement. The Government of Papua New Guinea will be provided an opportunity to participate in ownership.

Natural gas in InterOil’s Elk/Antelope structure is expected to underpin the project. Development activity is currently focussed on a third well and seismic analysis to help establish the size of the reserve.

“The detailed FEED schedule will continue to evolve,” Dr Hamilton said, “as more of the factors influencing the project become clear.”

 

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