WorleyParsons Principal Pipeline Consultant Bruce Andrews, a long-time member of both the international and Australian pipeline industry, begins his conversation on Papua New Guinea’s (PNG) pipeline industry by saying that WorleyParsons’ history with the country dates back over 30 years.
“In the 1980s we undertook construction management of the first Ok Tedi copper concentrate slurry pipeline for BHP. In the 1990s we began work, and continue to provide, engineering evaluations and pipeline designs relative to multiple production fields for Oil Search. In the 2000s we performed the front-end engineering and design (FEED) phase of the PNG Gas export pipelines to Queensland for ExxonMobil, and the front-end design and environmental assessment of the Elk/Antelope gas gathering and export pipelines for InterOil,” says Mr Andrews.
In 2010, WorleyParsons also performed concept engineering for the Papuan Foreland to the Gulf of Papua pipelines for Petromin PNG, which involved up to 500 km of onshore and offshore pipelines crossing lowlands, swamps and rivers.
PNG’s current pipeline growth
Most recently WorleyParsons and its EOS partners have undertaken FEED services for the PNG LNG Project, which is currently under construction.
The PNG LNG Project is a 6.9 MMt/a integrated LNG project operated by ExxonMobil subsidiary Esso Highlands. Gas for the project will be sourced from the Hides, Angore and Juha gas fields and from associated gas in the Kutubu, Agogo, Moran and Gobe Main oil fields.
All of the contributing fields are located in the Southern Highlands and Western provinces of PNG. Over 9 Tcf of gas and 200 MMbbl of associated liquids are expected to be produced over the project’s life.
Gas will be conditioned in the PNG Highlands and then transported via over 770 km of large diameter pipeline to a two-train LNG plant located approximately 20 km northwest of Port Moresby. The gas will then be liquefied at the LNG plant prior to being loaded onto ocean-going tankers to be shipped to international gas markets. Delivery of LNG is scheduled to commence in 2014.
The project involves 470 km of offshore pipeline, which completed all pre-commissioning activities in November 2012. The 900 mm diameter offshore pipeline commences at the Omati River landfall and follows the river for approximately 24 km past Goaribari Island to the open sea. The pipeline then crosses the Gulf of Papua to the Caution Bay landfall at the LNG plant site near Port Moresby.
The PNG LNG Project also includes an onshore pipeline component which consists of over 300 km of pipelines from the PNG Highlands to the landfall at the Omati River. The onshore pipeline was two-thirds welded by the end of 2012.
While the PNG LNG Project is the only LNG project under construction in the region, there are plans for another LNG facility to be built on the coast in the Gulf Province of PNG.
InterOil’s Gulf LNG Project is proposed to take gas from InterOil and Mitsui’s proposed condensate stripping plant, as well as from the Elk and Antelope fields in PPLs 237 and 238 in south-central PNG.
The project will be developed in two phases, using modular 500,000 t/a LNG trains. Phase One will have a total capacity of 2 MMt/a of LNG, and Phase Two of the project is set to involve a further 1 MMt/a expansion to follow one year after.
Additional infrastructure expected to be built for the project includes wells, gas gathering pipelines, condensate stripping facilities, condensate storage, a condensate pipeline and export handling facilities, a dry gas pipeline from the Elk and Antelope fields and LNG storage and marine export terminal.
Insofar, the FEED and design, construction and commissioning contracts for the Gulf LNG Project have been awarded to Bechtel and Energy World Corporation, respectively.
In addition to this, Gulf FLNG Project proponent Liquid Niugini is also exploring employment of a floating LNG (FLNG) vessel, which would integrate with and augment the land-based modules of the Gulf LNG Project.
In January 2012, FLEX LNG and Samsung Heavy Industries (SHI) completed the FEED for the FLNG vessel, but the timing of a potential final investment decision on the project is yet to be determined.
Shareholders in Liquid Niugini Gas, the proponent of the project, include InterOil, Pacific LNG Operations and the PNG Government-owned Petromin PNG Holdings.
Finally, WorleyParsons is currently working with ExxonMobil on Select Studies (front-end engineering assessments) for a potential new project in the Western Provence of PNG, with its Houston team leading the project and sharing work with specialists from Melbourne, suggesting that further opportunities for Australian companies to be involved in PNG pipeline projects may be on the horizon.
The early bird gets the PNG pipeline project
Mr Andrews says WorleyParsons creates value for its customers by getting involved in projects early.
“For example, with options assessments, we use the WorleyParsons trademark EcoNomics MCDA (multi-criteria decision assessment) tools to facilitate a weighted selection,” he says. “This advanced tool assists project risk management and improves sustainability assessment relative to a pipeline corridor under consideration. Sophisticated geographic information systems containing multi-layered site feature data permits realistic quantification of attributes.
“Working in triple-canopy rainforests in PNG requires innovative tools to ensure proper evaluation in the early phases of a project. We use light detection and ranging applications to provide contours along pipeline routes which are essential in challenging terrain and previously untried environments.
“Our experience with the PNG Gas and PNG LNG projects involved FEED services for a new field development – including processing plants, pipelines and supporting infrastructure, and the management of field survey programs – using advanced technological applications.”
The challenges of working in PNG
Mr Andrews says that, similar to other developing economies which are rich in natural resources, PNG’s unique geographic, socioeconomic, environmental and cultural factors have a decisive influence in resource projects.
“Linear projects such as pipelines trigger a range of impacts from extremely positive economic outcomes to negative community perceptions,” says Mr Andrews.
“The construction of a pipeline across the country can connect groups and provide tangible benefits such as teaching and training locals, but also can increase environmental concerns and tribal tensions with security implications.
“There have been a number of environmental and social challenges associated with projects in PNG in the past and using this experience results in the risks being well understood and proficiently managed.
“When operating in PNG, WorleyParsons places extremely high importance on community, health and safety, security planning and implementation. Our customers have the same awareness and concerns hence their specifications reflect such emphasis and compliance.”
An enduring future for PNG pipelines
When asked what future PNG pipeline projects WorleyParsons is looking to be involved in, Mr Andrews says “In PNG, pipelines are primarily required to link to an export facility, as domestic demand is relatively small. In the Western Provence, several hydrocarbon exploration groups have been active and a number have published plans to develop their resource. Initially natural gas liquid resources will be developed and pipelined to the Fly River for barging, via the inland Kiunga Port.
“Petromin PNG Holdings, wholly-owned by the State of PNG, has been proactive in evaluating the potential for a major joint user pipeline system to start at various hydrocarbon discovery sites in the Papuan Foreland and shipping gas and liquids to either a land-based or a floating LNG processing facility in the Gulf of Papua. With unparalleled in-country knowledge and a highly skilled pipeline team, these projects strongly resonate with WorleyParsons’ experience.”
Despite these challenges, Mr Andrews believes that pipelines in PNG, predominantly designed to Australian standards, will always have a future in the ongoing development of hydrocarbon resource projects. “This seems to be particularly relevant to the exploration and production industry as it pursues resources in our energy-hungry world,” he says.
“Unconventional oil and gas is well underway in Australia, but is yet another frontier for PNG. Pipelines are the most cost-effective and proven mass transportation method to deliver energy as a fluid, and this applies in the jungle or the desert. Pipeliners can take heart that the industry will endure in the future in PNG.”