Privately owned operator Arran Energy has received bids from four groups of engineering and construction contractors hopeful of putting in place the main upstream production facility linked to its Stanley development project in Papua New Guinea.

The onshore project will be the first petroleum development in Western Province’s Forelands region, and will initially be produced as a condensate stripping and gas recycling scheme.

This means the condensate will be separated from the petroleum stream while the gas will be reinjected into the Stanley reservoir, and developed at a later date.

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At a time when a number of proposed petroleum projects in PNG are struggling to gain momentum due to prolonged government negotiations, the Stanley project has the advantage of already having in place a gas agreement, a development licence and a pipeline licence.

Based in Australia, Arran Energy recently received bids from pre-qualified international turnkey contractors to complete detailed engineering, procurement and fabrication of a modular condensate stripping plant with gas reinjection capability.

The plant will be designed to process 90 million cubic feet per day of gas and 3000 barrels per day of natural gas liquids.

Arran executive chairman Michael McGowan told Upstream he is pleased with the quality of the bids from the four bidding groups — two from North America and two from Asia.

“We appreciate the significant work they put in to compiling their bids and look forward to working further with them as we work towards selecting the most appropriate bid for the project,” he said.

Arran is planning to take the final investment decision on Stanley in the first quarter of 2022, with detailed engineering, fabrication, construction and project start-up through the project execution stage to occur over the following 24 months.

There are a range of contingencies including the ongoing effects of the Covid-19 pandemic in PNG and on global supply chain operations.

We’re a small company, but we have a very experienced team, and that capability gives me the confidence in our execution plan

Michael McGowan, Arran’s executive chairman

“We’re a small company but we have a very experienced team, and that capability gives me the confidence in our execution plan,” McGowan said.

Other elements of the field development plan include the four Stanley wells which are already drilled — two production and two reinjection — while the condensate will be trucked to the nearby river and from there off to market.

A pipeline between the field and the river is planned for the later gas development phase.

McGowan said the first phase of the project is de-risked by Arran’s modular construction plan which will see the plant fabricated overseas and transported to the site for assembly commissioning and start-up.

“We do have the advantage of having all our government approvals in place and we feel very well supported by the Minister of Petroleum and Energy, the Department of Petroleum and Energy and our joint venture partner Kumul Petroleum,” he added.

In addition, Arran is looking forward to the Stanley project bringing a wide range of benefits to PNG and in particular the people of the Western Province.

Arran has a majority operated interest in a series of discoveries in Western Province following its acquisitions last year of the PNG assets owned by Repsol, Osaka Gas and Horizon Oil.

The discoveries include Stanley, Elevala/Ketu, Puk Puk/Douglas, Ubuntu and NW Koko.