Oil Search, Santos PNG LNG project resumes output following earthquake

The Exxon-led gas-export plant in PNG has restarted production ahead of schedule and is expected to resume shipments soon.

Robb M. Stewart

A landslide in PNG's Southern Highlands in 2012.

less than 2 min read

11:00AMApril 13, 2018.

Updated 11:52AMApril 13, 2018

Dow Jones

An Exxon-led gas-export plant in Papua New Guinea has restarted production and is expected to resume shipments soon, recovering from the massive quake that struck the country in late February.

ASX-listed energy explorers and producers Oil Search (OSH) and Santos (STO), who between them own 42.5 per cent of the ExxonMobil-led PNG LNG project, said output of liquefied natural gas had resumed at one of two production lines that were shut after the February 26 quake in the country’s Highlands region. The restart has been sooner than the eight-week time frame Exxon previously outlined.

The second production line is expected to restart as natural-gas production from fields in Papua New Guinea resumes, the companies said in statements Friday.

Oil Search operates all of Papua New Guinea’s producing oilfields, though these are dwarfed by output from Exxon’s US$19 billion PNG LNG operation, in which Oil Search has a 29 per cent interest and Santos a 13.5 per cent stake. Output at the plant near the capital Port Moresby, gas-processing facilities and Oil Search’s sites in the Highlands were all shut after the quake, which was followed by a series of aftershocks.

The magnitude-7.5 quake caused landslides that damaged roads and other infrastructure. Local police reported that at least 125 people were killed and Papua New Guinea’s government in March declared a state of emergency in the Hela, Southern Highlands, Western and Enga provinces.

Oil Search said relief efforts in collaboration with the government, and with support from Australia and New Zealand, was ongoing.

It added that during the time the PNG LNG operations were shut down, some maintenance work scheduled for April and October was completed and planned modifications to the Hides gas-conditioning plant were brought forward.

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