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Stanley Gas project development
Pasca A Off-Shore Gas Project
Source : Twinza Oil
PNG. In addition, the Pasca project is also the first project in PNG without project area landowners. This means any project benefits due for the landowners will be shared between the provincial government (PG) and local level governments (LLGs) instead. The licencee has submitted a range of technical documents from pre-FEED studies in support of the application for a petroleum development licence (APDL) describing and detailing the facilities to be installed. The DOP has conducted technical due diligence on the information submitted to ensure regulatory compliance requirements are met. The review is still ongoing with FEED to be executed after the signing of the gas agreement. The gas agreement between the state and the applicant to agree on the fiscal terms of the development of the Pasca A project was completed in July 2021 and signing is pending. The project will announce FEED and FID after the signing of the gas agreement. Meanwhile, the state and developer Twinza agreed on 6 July 2021 for the state to take up to 55% stake in the project including 2% royalty (as gross deductible), 2% development levy (as gross deductible) and 5% production levy (as gross deductible). Outstanding regulatory compliance requirements include the granting of the petroleum development licence (PDL) and staging of the development forum. An instrument under the Oil and Gas Act was issued by the director requesting additional information for the second phase of the project. 8.4. Stanley Gas Project Arran Energy is now the new operator of the Stanley Gas Project, taking over from Repsol by buying its interests in PDL10 in 2020. The Stanley Gas Field was discovered in 1998 by Santos Niugini Exploration Ltd in the Western Province with a certified resource volume at best case of 361 BCF (billion cubic feet) of gas and 11.1 million barrels (mmlbls) of condensate. It is a small project, resource- wise. The Stanley gas agreement was signed in May 2014 with then operators Horizon Oil and Repsol Oil & Gas. Subsequently, PLD 10 was granted for its development. However, the field has not been developed until recently in January 2022, Arron Energy acquired the interests of Repsol Oil & Gas Pty Ltd and Horizon Oil in PNG to become the new operator. The initial project scope (2014) by then developer, Horizon Oil Ltd was to produce gas and strip condensate for market and re-inject gas to reservoir for future commercial options as gas markets become mature. The initial project economics (2014) puts the project at around US$300 million capital expenditure with a net cash flow of US$600 million with the state’s total take at 57%. It is to be noted that the oil price ranges were in US$80 to $100 per barrel at that time. Current scope (2022, under review) by the new developer Arran Energy Ltd is to do the same as initially proposed, however at a reduced production and plant capacity to yield more NPV (net present value) on the investment dollars. Arran Energy’s base case project economics is US$111 million Capex, US$65.60 million NPV, modelled at US$65 per barrel with a US$47.2 per barrel break even oil price (brent) and a 3.1-year payback period. For the condensate production only, the production profile is 20 years with state take on corporate income tax projected at US$29 million. The project anticipates first production in the first quarter of 2024. The department's review of the project scope is still under way with recommendations to tne Petroleum Advisory Board and Minister for Petroleum pending.
Source : Horizon Oil
Current PDL 10 joint venture partners are: Arran Energy Ltd (90%) and Kumul Petroleum Holdings Ltd (KPHL) (10%). The state nominee KPHL will back in, taking up to 22.5% equity in the project. 8.5. Elevala Ketu Gas Project Arran Energy is also the operator of the Elevala Ketu Gas Project, taking over from Horizon Oil by buying the interests of Horizon Oil in PRL 21. In 2020, Horizon Oil sold its PNG interests to Arran Energy Investments (known as Arran Energy Elevala Ltd) at US$3.5 million (K12.2 million) in cash. At the time, Horizon Oil had a 30% stake in the Stanley field (PDL 10), 30.1% stake in the Elevala Ketu fields, 30% stake in the Ubuntu field, 20% stake in the Pukpuk and Douglas fields, and 80-100% stake in the surrounding exploration licences. Horizon Oil (Papua) Ltd as the then operator of PRL 21, on behalf of its JV partners made an application for a new petroleum development licence (APDL 11) and pipeline licences (APL12 and APL13) on 17 March 2014 to commercialise the Elevala/Ketu gas resources in PRL 21 in Western Province. The gas resource to underpin this development is estimated at 1.0 trillion cubic feet of gas and 55 million barrels of condensate. The then Horizon Oil proposed development concept is similar to the Stanley gas project and involves gas production from the Elevala, Ketu and Tingu gas reservoirs, and construction/installation of process facilities to produce condensate. Dry gas will be re-injected back into the reservoir for future development. The recycled dry gas will be produced later as gas markets mature and gas sales contracts are established. All statutory compliances and due diligence have been completed including technical review, LOBID, ministerial determination, and environment permit. Only the staging of the development forum in Kiunga and grant of the PDL remain outstanding. Construction and procurement were initially planned to begin year- end 2015 and first condensate cargo expected in 2016. However, Arran Energy made an amended application to the original APDL 12 on 30 November 2021. It is important to note the amended application request seven additional blocks from two different licences (fields) to be added to the original APDL 12 application which consisted of nine blocks in only PRL 21. The additional blocks include two blocks in PRL 28 (1847 & 1848) containing the Ubuntu field and five blocks from PPL 5 (1919, 1989, 1990, 1991 &1992).
VOLUME 34 2023
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