The Exxon Mobil Corp-led PNG LNG joint venture on Tuesday announced a final investment decision (FID) to proceed with a tie-in project to unlock more feed gas for the liquefaction facility in Papua New Guinea.
Targeted to be put onstream 2028, the Agogo Production Facility (APF) is designed to deliver an incremental production of about 135 million cubic feet a day, PNG LNG co-owner Santos Ltd said in a press release.
“The APF Tie-In Project will deliver gas from the Santos-operated Agogo Production Facility to the PNG LNG gas pipeline via a new 19-kilometer [11.81 miles] pipeline, together with two new wells and associated production facility modifications”, Adelaide-based Santos said.
“Santos’ share of capital expenditure is approximately AUD 160 million (gross capex approximately AUD 400 million over three years)”.
Santos chief executive and managing director Kevin Gallagher said, “The execution of this project will convert Santos’ 66 mmboe [million barrels of oil equivalent] 2P [proven and probable] undeveloped reserves into developed reserves, delivering incremental net production of ~54 mmscf/d [million standard cubic feet per day] with significant upside potential depending on reservoir performance”.
“With an expected IRR [internal rate of return] of greater than 50 percent and a payback period less than four years from FID, and approximately two years from first gas, the project is expected to be strongly value-accretive, support our long-term production profile and sustain feed gas supply to PNG LNG”, Gallagher added.
Brett Darley, Santos chief operating officer for Australia and Papua New Guinea, said, “Our focus is now on progressing detailed design for the facility modification, awarding the two main construction contracts and progressing the temporary construction camp to drive towards first gas in the second quarter of 2028”.
PNG LNG produced 2.13 million metric tons of liquefied natural gas (LNG) gross and exported 28 cargos of LNG in the first quarter of 2026, according to Santos’ quarterly report.
Put into service April 2014, the $19-billion PNG LNG includes gas production and processing facilities that extend from the provinces of Hela, Southern Highlands, Western Province and Gulf Province to Port Moresby, including a gas conditioning plant at the Hides gas field and a two-train liquefaction and storage facility near the capital. The facilities are linked by over 700 kilometers of onshore and offshore pipelines, according to the owners.
Santos owns 39.9 percent in the PNG LNG JV, operated by ExxonMobil. The other partners are ENEOS Holdings Inc and Papua New Guinea’s state-owned companies Kumul Petroleum Holdings Ltd and Mineral Resources Development Company Ltd.
PNG LNG is different from the Papua LNG project operated by TotalEnergies SE with Santos, ENEOS and ExxonMobil as partners. The two projects would be connected via midstream infrastructure, according to Santos. The Papua LNG partners expect to make a FID by yearend.
“Rebid for the upstream engineering, procurement and construction contracts has been completed and project financing discussions are progressing”, Santos said in its quarterly report April 23.