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methanol project

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    Talks on methanol project underway

    Joint venture partners Itochu Corp, MGC and
    Oil Search looking into the plant's feasibility study

    By BAEAU TAI
    DISCUSSIONS on a detailed feasibility study into a world-scale multi-million kina dimethyl ethylene/methanol plant in Papua New Guinea are currently underway between the project’s joint venture partners.
    Based on a pre-feasibility study completed last year, partners Itochu Corporation, Mitsubishi Gas Chemicals and Oil Search Ltd are moving into the second phase, which is the detailed feasibility study and they are discussing about how they will carry it out.
    A source from the gas industry said yesterday the pre-feasibility study has confirmed the project's viability and the detailed study should confirm to the partners that they could invest in the project.
    “After the completion of the detailed study, we will be discussing with the government issues like fiscal incentives,” the source said.
    In June 2003, the joint venture partners signed a pre-feasibility study agreement on the export methanol from PNG.
    The natural gas feedstock for the methanol facility would be supplied from the Kimu gas field located onshore within petroleum retention 08 and the Uramu gas field located west of Papua within PRL 10.
    A summary of the pre-feasibility study report was handed to the government last year.
    The study recommended moving into a pre-development agreement for the plant, using gas reserves from these fields or elsewhere in Oil Search's portfolio.
    The study has moved PNG gas up the list of potential suppliers of gas for the next major Japanese methanol plant development, based on a highly competitive gas price and attractive fiscal incentives.
    Oil Search has already signed a PDA with EnerSea Transport LLC (a US-based technology and service provider for CNG marine transport solutions) and Itochu to further explore the opportunity for the transport of compressed natural gas from PNG to New Zealand.
    The PNG government, Itochu and MGC came up with a proposal to build the methanol plant, and under the proposal, the Government will review the country’s taxation regime covering the project while Itochu will look for some US$500 million (K1.6 billion) financing and MCG to build the plant.

    From The National (PNG newspaper) 6/1/05
    http://www.thenational.com.pg/0106/business1.htm
 
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