Update on OIL AND GAS SECURITY

Transcription

1 Sessin4-11 Update n OIL AND GAS SECURITY PANDA ISHMAEL PRINCIPAL PETROLEUM PROJECT COORDINATOR & KEN JAMES LNG PROJECT COORDINATOR STATE DEPARTMENT OF PETROLEM 1

2 Oil and Gas Supply and Demand Situatin Intrductin Papua New Guinea (PNG) is a natin made up f ver 8 Millin peple with ver 700 different languages and culture. The cuntry depends heavily n the exprt f Nn Renewable Resurces, with the Mining and Petrleum sectr cntributing mre than half the cuntry's revenue. In the Petrleum Sectr PNG exprts mainly Crude Oil and LNG. A small quantity f petrleum prducts are als exprted by the cuntry s nly refinery (Napanapa). Crude Oil prductin in PNG began in 1991 by Chevrn until Oil Search tk ver in 2004 which perates the ils fields. LNG prductin and exprt started in 2014 by Exxn Mbil. PNG has nly 1 cmmercial refinery. Napanapa Refinery built and perated by Inter Oil and recently bught by Puma Energy 2

3 Oil and Gas Supply and Demand Situatin Crude Oil Supply and Demand in PNG PNG Oil Field generally prduce Sweet Crude and Cndensate* (*frm gas fields). Cumulative Crude Oil prductin in PNG since prductin began in 1991 is 52,334,265 mstb. Oil prductin frm the maturing fields are declining frm stb/d in 1991 t stb/d in 2017 (latest 2017, Oil Search). Hwever, the PNG LNG prject has added ecnmic life extensin t the maturing il fields. (Oil fields t gas fields). Furthermre, Cndensate frm the PNG LNG prject is added t the il exprt. Mst f the crude were exprted until 2004 when the nly refinery (Napanapa) in PNG was cmpleted, thus lcal supply began. Oil/Cndensate exprts generates apprximately USD 700 Millin per year (2 billin Kina equivalent) 3

4 Oil and Gas Supply and Demand Situatin Crude Oil Supply and Demand in PNG The nly Crude il imprter in PNG is the Napanapa Refinery perated by PUMA Energy Tw mini refineries are perated by Oil Search* fr their internal peratinal use. (*peratr f the prducing il fields in PNG) The Napanapa Refinery imprts crude il frm Australia, Malaysia and Africa t meet refinery requirements, which supplies70% f the lcal petrleum prduct needs. The remaining 30% f petrleum prduct need in PNG is imprted and supplied by ther agents (Island Mbil, Ttal, Niugini Oil, etc) PNG s Oil Reserves stands at apprximately; Maturing fields (Oil Search Operated) 59, 427 Mstb (2P Reserves) 2015 Cnsiderable cndensate have been discvered in mst gas fields like the PNG LNG prject and in mst explratin licenses. That includes prpsed LNG prject fields; 1. Papua LNG (Ttal Operated) Elk/Antelpe; (apprx. 9 tcf gas) 2. P nyang Fields (Exxn & Oil Search) (2.5 tcf gas) 3. Western LNG (Repsl & Hrizn) Ketu/Elevala; Stanley Gas; etc, (apprx. 4 tcf) 4. Pasca Offshre Prject (Twinza) (aprx 2 tcf gas) 4

5 Oil and Gas Supply and Demand Situatin Refinery Capacity and Oil prductins in PNG The Napanapa Refinery has a full capacity f 36,000 bpd Refinery blends sweet crude frm Kutubu (PNG) with imprted crude il frm Australia, Malaysia and Africa t meet refinery requirements, 65 % f the Petrleum prducts frm the refinery is supplied t meet 70% f the lcal petrleum prduct needs. The remaining 35% is exprted t Asian markets. The remaining 30% f petrleum prduct need in PNG is imprted and distributed by ther agents (Island Mbil, Ttal, Niugini Oil, etc) The refinery has a capacity t stre 750,000 barrels f crude and apprximately 1.1 millin barrels f refined prducts. 5

6 Oil and Gas Supply and Demand Situatin Gas Supply and Demand in PNG Since its inceptin in 2014, LNG is the single largest exprt cmmdity in PNG. LNG exprts generate apprximately 10 billin kina per year (USD 3 billin equivalent). PNG LNG shipped mstly t buyers in Japan, China and Taiwan. Current PNG gas reserve stands at apprximately 30 tcf. (this is frm bth prducing and explratin fields, thus sme have nt been certified by third party) 6

7 Oil and Gas Supply and Demand Situatin Gas Supply and Demand in PNG Cumulative Gas Prductin in PNG since LNG peratins began in 2014 t end 2017 is 1,046,959 mmscf f which 43,722,220 m 3 f LNG exprted. Hwever, Gas has been prduced in Hides and supplied t Pgera Gld Mine fr Pwer generatin since On average, mmscf/mnth t prduce 2 MW/mnth. GPNG and Exxn Mbil are currently discussin ptins t supply gas fr dmestic pwer generatin in PNG. Imprt f LPG (liquid petrleum gas) is steadily increasing at 5% rate. It is nly cnsumed by 3% f the ppulatin PNG Gas Prductin PNG LNG Exprt PNG LNG gas exprt figures Year (mmscf) (m^3) ,031 6,932, ,475 9,522, ,338 12,667, ,115 14,599,753 Ttal 1,046,959 43,722,220 LPG is imprted frm Australia by Origin Gas. 7

8 Oil and Gas Supply and Demand Situatin Natural Gas Prductin and Cnsumptin in PNG PNG LNG prject is primarily fr exprt and there is n dmestic fftake f gas. Gas t electricity is an attractive and envirnmentally clean ptin t meet future dmestic demands. Hwever, there are n clear gvernment plicy fr the gas sectr, which will impede the use f gas fr pwer generatin. A framewrk fr develpment f gasbased pwer generatin is als planned and is negtiated by GPNG with cmpanies. LPG (Liquid Petrleum Gas) is the nly gas imprted. The refinery als prduces and supplies t dmestic market. Surce: Gvernment f Papua New Guinea, Department f Natinal Planning and Mnitring Papua New Guinea Develpment Strategic Plan, Prt Mresby. Gas will be a majr play in pwer generatin in PNG in the near future as per GPNG plan 8

9 Oil and Gas Supply and Demand Situatin Natural Gas Prductin and Exprt PNG primarily exprts LNG gas. Apprximately 6.6 millin tnes per year. Gas is extracted, cnditined and piped 700km frm the highlands t the LNG prcessing & lading pint near Prt Mresby. 4 majr custmer; 1. Chinese Petrleum Crpratin f Taiwan (1.2 Mtpa) 2. Osaka Gas Cmpany (1.5 Mtpa) 3. Tky Electric Pwer Cmpany f Japan (1.8 Mtpa) 4. Unipec Asia Cmpany (2 Mpta) (a subsidiary f Sinpec) 9

10 Oil and Gas Security Plicy Oil & Gas Supply Security Plicy The cuntry wishes t build frm il prductin and develp gas, but while the cuntry has an il and gas act, it has n gas r petrleum plicy at present. Cntracts are negtiated and regulatry cnditins are mandated thrugh cntracts (Gas Agreements/MOA) rather than thrugh a transparent plicy. The existing liquefied natural gas (LNG) prject is exprting all its utput and is nt available fr dmestic market bligatins in the cuntry. The cuntry still lacks a cmprehensive energy sectr plicy. A draft plicy has been prepared and is under cnsideratin, and the Department f Petrleum & Energy (DPE) expects that the plicy will be finalized and adpted. The cuntry wishes t develp gas based pwer generatin but lacks plicy. Thus, there are n indicatrs in place t gauge security f supply. PNG des nt have tragic il stck hlding facilities fr emergency il and gas supply disruptins except existing cmpanies strage facilities. 10

11 Oil and Gas Security Plicy Gaps Plicy Issues and Gaps that need t be addressed There is n clear plicy fr the gas / energy sectr, which will impede the use f gas fr pwer generatin and/r lcal dmestic market bligatins. There are cnstraints in the frmulatin f the draft plicy. Lack f capacity Lack f capacity in terms f human and physical resurces Management Supprt and Cmmitment Lacking management supprt and attentin twards frmulatin f key plicies Training & Capacity Building Institutinal capacity is als a cnstraint. The DPE has inadequate trained staff t undertake all its intended functins and plans. 11

12 Oil and Gas Supply Demand Cnclusin: Papua New Guinea s (PNG) ecnmy is highly driven by the extractive industry. Oil and Gas are the majr players and are largely exprted. Demand in electricity will see a demand in Gas t Electricity prjects ging int the future. (GPNG Visin 2050). N clear plicy directive fr the energy sectr in terms f Gas. Gvernment Plicy cnstraints are a cmbinatins f; Lack f capacity Gvernment & Management Supprt and Cmmitment Training & Capacity Building Institutinal capacity 12

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