Smit Lamnalco Takes Key Role in Papua New Guinea LNG Project

April 1, 2013

A milestone has been reached in the ground-breaking Papua New Guinea Liquefied Natural Gas (PN LNG) project, following the award of the towage and marine support contract to global offshore and gas terminal service specialist Smit Lamnalco.

The award is the latest step forward in the multinational project that is scheduled to begin delivering LNG in 2014, with drilling work on the first of the fields gathering pace.
Work has been underway at the Hides natural gas field since late summer and, over the course of the project’s 30-year lifespan, more than 9 trillion cubic feet (tcf) of gas is expected to be sourced from the Hides, Angore, Juha, Kutubu, Agogo, Moran and Gobe Main fields at the rate of 6.6 million tons per annum. Investment in the initial phase of the project, excluding shipping costs, is estimated at $15.7 billion.

Each of the fields is located in the Southern Highlands and Western provinces of Papua New Guinea and the gas will be conditioned in the Highlands and transported by pipeline to an LNG plant approximately 20 kilometers northwest of Port Moresby. The PNG LNG project will supply major customers including Chinese Petroleum Corporation, Osaka Gas Company Limited, The Tokyo Electric Power Company Inc and Unipec Asia Company Limited, a subsidiary of China Petroleum and Chemical Corporation (Sinopec).

PNG LNG will have significant ramifications on the local economy and environment for decades to come. The independent research group ACIL Tasman has predicted that when the project is in production it will more than double the country’s GDP, triple export revenues and create significant employment and business development opportunities for Papua New Guineans while maintaining the crucial balance between promoting economic growth and protecting the environment. More than 10,000 Papua New Guineans are reckoned to have undertaken training associated with the project overall.

All of this in line with Smit Lamnalco company policy, which is centred on developing local expertise wherever it operates. The company’s 10-year marine support and towage contract will provide tugboats and crews to assist berthing LNG carriers in Papua New Guinea. It is worth approximately $120 million over the period, which could be extended to 25 years.
To meet its obligations, Smit Lamnalco has placed an order with Hong Kong-based shipbuilder, Cheoy Lee, for a series of four 32-meter long RAstar 3200 class Azimuth Stern Drive (ASD) tugs. Delivery of the first two new tugs from the Pearl River Delta yard is scheduled for October and November 2013 with the remaining two following in January and February 2014.

“Papua New Guinea is a proud seafaring nation and we are committed to creating local job opportunities,” says Paul Grizell, Smit Lamnalco General Manager Australasia. “Over time we intend to hire nationals to operate on our vessels, trained to international standards. Timely asset deployment and crew training standards played a key role in ExxonMobil entrusting us with this contract.”

Tug Match
As part of its commitment to the project Smit Lamnalco will establish a dedicated operation in Papua New