Making its mark

February 10, 2014

Papua New Guinea is home to the Esso Highlands Ltd.- operated PNG LNG project, the first of its kind in the country’s history. Sarah Parker Musarra provides an update and examines the milestone project’s offshore pipeline.

Occupying a small corner of Southeast Asia, World Bank data shows that Papua New Guinea (PNG) is home to seven million people, which is 1.1 million less than the population of New York City (2012).

“The mineral revenue is the main driver of the economy right now,” said Jonathan Lacouture, GlobalData’s upstream lead analyst for Asia-Pacific. “The gas in the country is so depressed; the infrastructure is relatively lacking. There was no room to develop the gas production stream. “When the national oil companies discovered the Hides, the Juha, the Angora, and a couple of other slightly small fields, they realized they had enough for an LNG facility,” Lacouture said.

The field discoveries soon piqued the interest of supermajor ExxonMobil. “It is a country that is uniquely located to high-demand markets in Asia Pacific,” said Decie Autin, project executive, PNG LNG. Autin is responsible for all aspects of PNG LNG’s planning, development and execution.

With sufficient proven gas reserves, ExxonMobil through its subsidiary, Esso Highlands Ltd., decided to establish an LNG plant in Papua New Guinea: PNG LNG.

Located on the Gulf of Papua in the capital city of Port Moresby, PNG LNG is a US$19 billion, two-train LNG production and processing plant. With in-house liquefaction and storage facilities, it is capable of producing 6.9MM tpy (mtpa), which Lacouture describes as “a pretty substantial level of production for [PNG].”

Esso estimates that PNG LNG will deliver more than 9Tcf of gas over the 30-yr life of the plant, and Autin said that the country of PNG will benefit in other areas as well.

“The PNG LNG project has the potential to lay a foundation for a sustainable economic future in [PNG] as the largest private-sector investment in the country,” she said. “The project will boost GDP and export earnings...and provide a catalyst to further gas-based industry development.”

Spanning three provinces within PNG, partner Oil Search Ltd. said that gas will be sourced from the Hides, Angore and Juha fields, with associated gas originating from Kutubu, Agogo, Moran, and Gobe Main. Esso said that more than 700km of pipelines transport the gas to the processing facility, which includes an offshore pipeline that runs alongside the coast of PNG.

Beginning at the Gulf Province’s Omati River landfall, the offshore pipeline runs nearly 24km to the LNG plant site. Built with concrete-coated carbon steel, Esso said that more than 34,000 joints were necessary for the 407km-long, 36in.-ID pipeline.

Esso contracted Italy’s Saipem to build the pipeline’s offshore portion using two installation vessels: the 148.5m-long, semisubmersible pipelay barge, Semac 1, and the 140m-long trench/pipelay barge, Castoro 10.

The offshore pipelay began Oct. 31, 2011, with shore pull, hefting pipe onto the coast to connect it with the section onland.

Deepwater installation, which reached depths of 110m, began at the Caution Bay landfall and concluded at the Kumul marine terminal, was performed by Semac 1. Sections in the Caution Bay landfall up to the LNG shipping channel were trenched and backfilled for stability and protection. All other sections were placed directly on the seafloor to allow for natural burial over time. Trenching was used in the shallow-water section of the pipeline; however, Autin said that trenching was kept to a minimum to reduce the environmental impact.

Shallow-water work was completed by Castoro 10. The pipeline was laid in two sections over eight months.

On July 26, 2012, Castoro 10 completed the offshore pipelay by connecting the deepwater and shallow-water sections through an above-water tie-in. Six cranes lifted each end simultaneously. The pipeline ends were cut off, joined and welded before the pipeline was lowered into the water.

Esso announced that all pipelay was completed Feb. 14, 2013, following the final tie-in to the 292m-long onshore pipeline at the Omati landfall.

First gas delivery is scheduled for Q2 2014, and Lacouture said that PNG is anticipating industry interest.

“PNG did not exist in the LNG market. This will be their first foray into the market. Depending on how this goes, PNG could become a moderately-sized LNG exporter,” Lacouture said.

images courtesy of Esso Highlands Ltd.