In 1986, oil in commercial quantities was discovered at Iagifu in the southern highlands of PNG near Lake Kutubu, from which the project derives its name. The joint ventures, led by Chevron Niugini, signed an agreement with the PNG Government in December 1990 signaling the go-ahead of the project.
The Exxon-Mobil liquefied natural gas project is being constructed at an estimated cost of U$18 billion and the company projects it will double PNG’s gross domestic product - source. No data has been released on the potential impact on gross NATIONAL product which is a much better indicator of how much PNG might benefit from the project.
The project will exploit undeveloped petroleum resources in the Hides, Angore and Juha fields and associated gas resources in the currently operating oil fields at Kutubu, Agogo, Gobe and Moran.
The project is estimated to produce 6.6 million tones of liquefied natural gas per year and will have a 30 year lifespan. The first cargo is expected to be exported in late 2013 or 2014.
Twenty year sales and purchase agreements have been signed with Japan’s Osaka Gas Co (1.5mta); Tokyo Electric Power Co (1.8mta); China Petroleum and Chemical Corp (2.0mta); and China Petroleum Co of Taiwan (1.3mta)
The project operator is Esso Highlands Ltd, a subsidiary of Exxon-Mobil. Exxon holds a 33.2% stake in the project, Oil Search 29%, the PNG government (through IPBC) 16.6%, Santos 13.5%, Nippon Oil 4.7%, PNG landowners (through the Mineral Resource Development Co) 2.8% and Petromin 0.2%.
The Export Import Bank of the US (Eximbank) has approved $3 billion to support US exports for the project and will finance the project together with other export credit agencies and 17 commercial banks.
InterOil announced in December 2009 that the PNG government, through the National Executive Council, had approved its plans for the construction of a liquefied natural gas (LNG) plant.
InterOil says the $7 billion LNG project will be developed with its joint venture partners, which include Pacific LNG Operations and the government of Papua New Guinea (through its nominee Petromin PNG Holdings)
According to InterOil the project will involve a two-train LNG facility, with each train capable of producing approximately 4 million tons of LNG per annum. First production of LNG is projected towards the end of 2014 or beginning of 2015, although InterOil says it is progressing a proposed liquids stripping plant, to be located in Gulf Province, in late 2011 or early 2012. The project will use natural gas resources from the Elk/Antelope field. The natural gas will be treated at a conditioning plant in the Gulf Province and then transported to the proposed LNG plant site near the company's existing refinery at Napa Napa outside Port Moresby.