MELBOURNE, Oct 20 (Reuters) - The Papua New Guinea Liquefied Natural Gas (PNG LNG) project is expected to run at least 6 percent above its name plate capacity through 2016, takeover target Oil Search Ltd said on Tuesday, highlighting the value of its prized asset.
Oil Search, which owns a 29 percent stake in PNG LNG, rejected an A$11.7 billion ($8.5 billion) takeover proposal from bigger rival Woodside Petroleum Ltd in September, saying it “grossly undervalued” the company.
PNG LNG ran at an annualised rate of 7.4 million tonnes a year in the September quarter, and Oil Search said it was confident the plant would at least run at 7.3 mtpa for the rest of this year and 2016, above its design capacity of 6.9 mtpa.
“Demand for the project’s spot volumes remained robust, reflecting the proven reliability of the plant and the high heating value of the gas relative to LNG projects globally,” it said in its quarterly report.
The owners of PNG LNG, led by ExxonMobil Corp, are focused on lining up gas reserves to expand the plant with a third module, or train, with most of the gas expected to come from the P‘nyang field and possibly the Muruk prospect.
Oil Search played down concerns recently raised by land owners over delays in receiving promised benefits from the PNG government out of LNG revenue, saying a judge was in the process of resolving issues over who was eligible.
“The project retains strong support from the local community,” Oil Search said.
$1 = 1.3765 Australian dollars Reporting by Sonali Paul; Editing by Richard Pullin