InterOil Corporation and Pacific LNG Operations Ltd. announced the signing of a Heads of Agreement (HOA) with Gunvor Singapore Pte. Ltd., for the supply of one million tonnes per annum (mtpa) of liquefied natural gas (LNG) from the Gulf LNG Project in Papua New Guinea.
The signing occurred in Port Moresby and was witnessed and supported by Prime Minister Peter O'Neill, the Gulf Governor Havila Kavo, and other cabinet Ministers. The Prime Minister witnessed the signing of the HOA and acknowledged that the PNG Government supports the phased LNG development of the Gulf LNG project and the financial structure to ensure LNG revenue for all stakeholders by 2014 to early 2015.
Mr. Philip Fjeld, CEO of FLEX LNG LTD, was present to assure the PNG government that FLEX LNG and Samsung can be ready for FID by Year end 2011, in line with the PNG government requests. The Gulf LNG Project in Papua New Guinea (PNG) comprises the Elk and Antelope gas fields and the planned liquefaction and associated facilities in the Gulf Province of PNG to be developed by Liquid Niugini Gas Ltd., InterOil and Pacific LNG's joint-venture project company.
The HOA, while not binding, sets out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of one mtpa of LNG, for a period of 15 years commencing in 2015, to be supplied by the proposed Gulf LNG Project in PNG. InterOil and Pacific LNG are striving to complete negotiations and execute a binding Sales and Purchase Agreement (SPA) with Gunvor by the second quarter of 2012.
InterOil Chief Executive Officer Phil Mulacek commented, "We are pleased to have executed an HOA with Gunvor, for long-term LNG off-take from our Gulf LNG Project in Papua New Guinea. InterOil is proud to work with Gunvor, one of the largest energy commodity movers in the world. With 2.3 mtpa now committed under HOA's, InterOil has preliminary LNG offtake arrangements for more than 50% of its start-up LNG volumes.
We expect the HOAs to facilitate remaining infrastructure financing arrangements with binding SPA, driving robust debt coverage for the Gulf LNG project."
Liquid Niugini Gas V.P. LNG, Conrad Kerr, commented, "Gunvor has become an established player in the LNG industry through its success in acquiring, and moving large amounts of short-term LNG cargoes in the last few years. We are interested in value optimization for our LNG, and a long-term relationship with Gunvor enhances this strategy."
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