Minister for Petroleum and Energy, Nixon Philip Duban signed the Gas Agreement at the Madang Resort today.
Those present included landowners of the Stanley Gas Project in the Western Province, Horizon Oil’s subsidiary company, Horizon Oil Papua Limited and its fellow licensees, on behalf of the State.
The Gas Agreement prescribes key rights and obligations of the State and licensees in respect of the Stanley Project, including the project fiscal terms and commitments to local content.
The grant of PDL 10 is the final step to completion of Horizon Oil’s sale of 40% of its PNG asset to Japan’s Osaka Gas.
This will see a transfer to Horizon Oil approximately US$77 million.
That is the total balance of the sale that proceeds plus adjustments.
The Stanley project is located approximately 40 km north of Kiunga and will be developed by a joint venture composed of subsidiaries of Talisman Energy of Canada, Horizon Oil Limited of Australia, and Osaka Gas and Mitsubishi Corporation of Japan.
The development involves further expenditure of approximately US$300 million, leading to commencement of production in early 2016.
Horizon Oil Limited is listed on the Australian Stock Exchange and is one of Australia’s leading junior oil and gas companies.
It has approximately one thousand 234.6 million shares on issue and a market capitalisation of around AUS$426 million.
A Sydney based team of experienced staff oversee operations in some of its producing fields in New Zealand and Papua New Guinea and assets under development in China.
Mr. Duban said the project would deliver substantial benefits to the local people and businesses in the Western Province and Papua New Guinea.
He said, in a first for the country, he has locked down 15 per cent of the gas to remain within PNG for domestic marketing obligation.
The Stanley project entails the production of 140 million cubic feet of gas per day.
It is forecasted that the re-injected gas will ultimately be commercialized by way of a combination of sales to regional users.
The construction phase of the project would take over 20 months.
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