France's Total has emphasised its full commitment to the $15 billion Papua liquefied natural gas project in Papua New Guinea where it is aiming to extend the validity of recent bids for front-end engineering and design.

The project was recently unshackled from a long disruption in the wake of a new government coming to power in PNG in May.

The new government reviewed the development agreement that underpins the project — the Papua LNG Gas Agreement — and even sought to renegotiate certain elements of it before announcing on 3 September that it would honour the deal, but wanted to see increased national content and future pipeline and shipping ownership benefits linked to the project.

Total exploration and production president Arnaud Breuillac said at the company’s Investor Day in New York that Total is “moving forward with the attractive Papua LNG project which benefits from the low-cost onshore Elk-Antelope gas resource with high productivity per well of about 30,000 barrels of oil equivalent per day”.

He referred to it as a low-cost brownfield LNG extension project that takes advantage of synergies with the existing PNG LNG project operated by ExxonMobil.

The plan is to build three new LNG trains at the PNG LNG location each designed to produce 2.7 million tonnes per annum of LNG. Two trains are dedicated to Papua LNG and one is for the ExxonMobil-operated P’nyang field.

Breuillac said FEED is about to be launched for the project, with a final investment decision planned for 2021, not 2020 as previously targeted.

Sources said Total is working to extend the validity of the upstream FEED bids it has received.

It is understood four or possibly five bidding parties are in the mix — Fluor, McDermott, TechnipFMC with Clough, and Wood. SNC Lavalin is partnering with one of the contestants.

Breuillac highlighted that PNG is close to Asian LNG markets and therefore shipping costs are low, with cost of delivery to Asia estimated at less than US$3.50 per million British thermal units.

The project is expected to generate a net US$300 million per year of cash flow from operations from 2025 assuming the oil price is US$60 per barrel, added Breuillac.

The Papua LNG project is an upstream onshore development of the Elk-Antelope gas fields comprising a central processing facility, dual 60-kilometre onshore pipelines for gas and condensate, and dual 265-kilometre subsea pipelines to the two new LNG trains at Caution Bay near Port Moresby.

ExxonMobil is overseeing the FEED process for the three new LNG trains.

Total has signalled that its preferred construction method is pre-fabricated modules.

The French supermajor is optimistic about shipping pre-fabricated modules of more than 2000 tonnes up the Purari River to the site of the central processing facility.

It is the first petroleum project in the Gulf Province region, which Total has described as "remote and pristine" but with "enormous challenges" from logistical and environmental standpoints.

The gas fields are located about 30 kilometres from the Purari river.

Total said recently a large part of the central processing facility will be an acid gas removal unit.

Two wellpads will be built to host gas production wells, a water disposal well, and an acid gas injector well. Acid gases comprise 5.7% carbon dioxide and about 200 parts per million of hydrogen sulphide.

The Elk field, which is much smaller than Antelope, will be depleted in an accelerated way, and it will be the location where Total eventually reinjects the CO₂ and H₂S.

A gas gathering system will distribute gas and liquids down to the central processing facility.

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Total remains committed to Papua LNG plan