Exxon to invite bids for supply of PNG LNG tankers

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2008

Exxon Mobil Corp, operator of a planned US$11 billion liquefied natural gas project in Papua New Guinea, said it will invite shipyards and vessel owners to take part in a tender for the supply of tankers to transport the fuel. Pre-qualification for the tender and decisions on the required number and size of vessels will be completed by the end of the year, Exxon said yesterday in an e-mailed copy of an address an executive gave in the Chinese city of Shenzhen.
LNG demand is set to increase by more than 4 per cent annually to reach almost half a billion metric tons a year by 2030, about 15 per cent of global gas demand, Exxon estimates. The 6.3 million-tons-a-year Papua New Guinea project is scheduled to start shipments in late 2013 or 2014.
'PNG LNG plans to have a fleet of dedicated ships in order to control the required efficiency in shipping scheduling, making sure customers receive supplies in a safe and reliable manner from project startup,' Jeff Appleton, the project's vice-president for marketing, said in the address, made at a conference last week. 'We have a ship-acquisition strategy in place to ensure the best possible shipping arrangements.'
The LNG venture may buy between two and four ships, Dow Jones Newswires said Sept 25, citing Mr Appleton.
LNG buyers throughout Asia have expressed 'strong interest' in the fuel, Mr Appleton said. The venture will probably seal sales accords with more than one buyer, Credit Suisse Group said. 'There are suggestions that one buyer had submitted a tender for the full output of the PNG LNG project, although we understand that the JV has decided to diversify its risks by selecting several buyers,' Credit Suisse said yesterday in a report.
The project involves a 315-kilometre onshore pipeline and a 400-kilometre underwater pipeline, Mr Appleton said. The Papua New Guinea Parliament passed bills unopposed on Sept 18 to amend legislation in accordance with the terms of an agreement struck in April between the venture and the government on the fiscal terms for the project.

Source: Bloomberg