Oil and gas industry magnates Santos and Oil Search have reportedly announced that PNG LNG, has obtained a 3-year contract with the Hong Kong based PetroChina to supply the latter with LNG (liquified natural gas). Incidentally, PNG LNG is operated by the multinational oil and gas corporation ExxonMobil.

As per sources, about 0.45 million tons of LNG per year will be supplied to the Chinese company. The LNG will be shipped from the ExxonMobil’s Papua New Guinea operation plant for about 1.35 million Mt overall.

Peter Botten, Oil Search's Managing Director expressed his delight in having entered a sale and purchase agreement with PetroChina, a company that has been a diligent purchaser of PNG LNG’s spot cargoes. He further added that the first sale according to the new deal is anticipated to take place in the coming week.

According to the two companies, the agreement brings the PNG LNG total contracted values to 7 million Mt per year, 6.6 million Mt of which is already pledged under long-haul agreements to Osaka Gas, Sinopec, CPC, and JERA.

Santos stated that ExxonMobil as a representative of the partners in PNG LNG is in talks with several other entities for probable mid-term supply deals of LNG instead of spot transactions as well. Elaborating further, he said that these deals are anticipated to be finalized in short term and boost sales under the latest mid-term deals to about 1.3 million Mt per year.

The LNG plant has a nominal capacity of about 6.8 million Mt per year, a number above which it persistently known to operate.

Oil Search stated earlier that ever since completely arriving back online in April and post suffering an earthquake which forced a break in operations earlier in the year, PNG LNG witnessed an 8.5 million Mt per year production rate in May and June. A number that apparently exceeds the total production of about 8.3 million Mt for the calendar year of 2017, as per sources.