October 19, 2018 / 2:15 AM / a month ago

China's Sinopec in talks to lock in more Papua New Guinea LNG - sources

SINGAPORE, Oct 19 (Reuters) - Unipec Asia, the trading arm of Chinese oil major Sinopec , is in talks to buy more liquefied natural gas (LNG) from the Exxon Mobil Corp-operated Papua New Guinea project, five industry sources told Reuters.

The supply deal will likely start ahead of this winter and it will be for about three years, two of the sources briefed on the matter said. They spoke on condition of anonymity as they were not authorised to speak with media.

The exact volumes under discussion were not immediately clear but project holder Oil Search said in its half-yearly results statement in August that negotiations are ongoing to contract the project's final batch of mid-term supply totalling 0.45 million tonnes per annum (mmtpa).

The Papua New Guinea project has a total contracted volume of 7.5 mmtpa so far, according to Oil Search. The project has signed mid-term LNG sale and purchase agreements with PetroChina and oil major BP, and has sold 6.6 mmtpa under long-term contracts to Japanese trading giant JERA, Osaka Gas, Sinopec and Taiwan's CPC Corp.

It wasn't immediately clear whether Exxon is also currently in talks with other potential buyers of Papua New Guinea LNG.

An Exxon spokeswoman declined to comment, saying the company does not comment on commercial matters. A Sinopec spokesman did not comment. (Reporting by Jessica Jaganathan Editing by Kenneth Maxwell)

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