LNG News Editor:
Oil Search, the Papua New Guinea liquefied natural gas and oil player, posted impressive third-quarter results making the US$6.25-billion merger with Australian LNG plant operator Santos even more enticing as PNG LNG expansion plans also advanced.
Oil Search’s total operating revenue jumped to US$408M compared with US$189M in the same three months of 2020.
Gas sales
The company said third-quarter LNG and gas sales increased to US$330.9 from US$133.2M and for the first nine months of 2021 amounted to US$800.1M versus US$656.4M in the prior-year period.
Average prices fetched for PNG LNG and natural gas soared to US$10.02 per million British thermal units from US$4.23 per MMBtu in the year-ago quarter and US$8.61 per MMBtu in the previous quarter.
The PNG LNG plant at Caution Bay, operated by ExxonMobil Corp., saw 30 LNG cargoes delivered during the third quarter compared with 26 in the previous quarter.
The shipments comprised 29 cargoes sold under contract, including five under mid-term sale and purchase agreements, and one on the spot market.
There were two delivered ex-ship (DES) cargoes on the water at the end of the quarter. Among other cargo sales, three Kutubu blend oil shipments were sold during the quarter, one less than in the previous three months.
Peter Fredricson, the Acting Chief Executive, said the company was moving towards the Santos merger in confident mood.
Merger issues
“While the absolute focus of our workforce remains on safely delivering our strategic objectives, important steps were also taken during the quarter to advance the opportunity presented by the proposed merger with Santos,” declared Fredricson.
“The potential benefits of a combined entity remain clear, with the merged entity expected to sit amongst the world's 20 largest global oil and gas companies, bringing greater access to capital markets to enable funding for new and existing opportunities,” he explained.
The all-share Santos-Oil Search transaction brings together LNG assets in the Timor Sea, the Australian state of Queensland and in Papua New Guinea.
Under the deal Oil Search shareholders will own around 38.5 percent of the merged entity and Santos shareholders will own 61.5 percent.
“Importantly, the merger is also expected to create greater alignment across the LNG growth projects in PNG which would continue to support jobs, development and investment in PNG,” stated Fredricson.
During the third quarter, the Papua LNG project, with France's TotalEnergies as operator, experienced a ramp up in activity as it prepares to enter pre-front-end engineering and design before the end of 2021.
