March 21, 2018 / 6:44 AM / a month ago

Exxon still assessing damage to Papua New Guinea natural gas facilities

* LNG export project knocked out by major quake in late Feb.

* Quake damaged the remote Hides processing facility

* Still hopes to restart facility within 2 months of quake

By Florence Tan

KUALA LUMPUR, March 21 (Reuters) - A senior Exxon Mobil Corp executive said on Wednesday the company is still assessing damage to its natural gas processing plant in the mountains of Papua New Guinea, knocked out by a strong earthquake last month.

A powerful 7.5 magnitude quake struck near Exxon’s Hides facility on Feb. 25, killing dozens of people and halting production at the site. The temblor damaged power infrastructure and also led to the closure of the Komo jungle airfield, making access to the remote facility difficult.

Several aftershocks, as well as the remoteness of the gas field and processing plant - more than 700 kilometres from the export facility near the capital, Port Moresby - have made it difficult to assess and repair any damage, making it unclear when production and exports can resume.

“We’re doing a full assessment right now...We had a few aftershocks so you have to go through the assessments again up in the mountains to recheck the facilities,” said Neil Duffin, President of ExxonMobil’s production company, speaking during an oil and gas industry event in Kuala Lumpur, Malaysia.

Prior to the shutdown, Exxon’s Papua New Guinea Liquefied Natural Gas (PNG LNG) export project, had been producing at about 20 percent above its nominal capacity of 6.9 million tonnes a year.

Exxon has previously said it plans to restart shipments within eight weeks of the shutdown.

“I’m hoping we can actually start flowing gas within that two-month period,” Duffin said.

Led by Exxon, with a one-third stake, and its Australian partners Oil Search and Santos, PNG LNG is the impoverished country’s biggest revenue generator, bringing in around $3 billion in sales per year at current LNG prices LNG-AS. But the facility has also faced local criticism due to accident, as well as claims it did not spread wealth locally.

Exxon said in February it plans to almost double the facility’s export capacity to 16 million tonnes per year, together with its partners.

The partners in Papua New Guinea are racing to start producing from new trains by around 2023 or 2024, when the LNG market is expected to need new supply due to rapidly growing demand in Asia and a lack of other new projects. (Reporting by Florence Tan Writing by Henning Gloystein Editing by Kenneth Maxwell)

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