Energy Intelligence - Q&A: Total Places Greater Priority on Papua LNG

The ongoing force majeure at Mozambique LNG has seen TotalEnergies intensify efforts to advance its Papua LNG project. In an interview on the sidelines of Singapore International Energy Week, Julien Pouget, the French major’s senior vice president for E&P and renewables in Asia, gave an update on the status of the liquefaction scheme in Papua New Guinea and expounded on some of its lesser known features. He also discussed operations in Australia and Malaysia — two other countries that are central to Total’s strategy in the region. An edited transcript follows.

Q: How has the Ukraine conflict affected TotalEnergies’ views on the role of LNG in Asia?

A: We are convinced that LNG is a key transition fuel because it allows [the world] to displace coal. It also complements the current renewables, which are intermittent, and gas happens to be a very good solution to do that. This is why we consider natural gas and LNG as being a very important part of the energy transition.

Q: Even when LNG and natural gas are not affordable for many emerging countries?

A: It is important that gas, and energy in general, is affordable. In this context, we are developing new capacity such as the 6 million ton per year capacity Papua LNG project, which is ideally positioned geographically to bring more LNG to the Asian market. But we have several other projects. You may have seen that we were the first international partners selected by Qatar for North Field East and North Field South.

Q: How is Papua LNG progressing?

A: We started Feed [front-end engineering and design] studies in July for the upstream part of the project. We are planning to start by the end of this year the downstream Feed studies. We are targeting FID by the end of 2023 and to start operations by the end of 2027. One of the interesting features of this project is that we are implementing first-day reinjection of the native CO2 [carbon dioxide] in the reservoirs.

Q: What about the downstream side of the project?

A: The plan is to integrate the liquefaction part in the existing PNG LNG plant because there are synergies, and it makes a lot of sense to have this plant extended. Exxon [Mobil] is the delegated operator for the Papua LNG trains. The pre-Feed studies have been completed and we will enter Feed by the end of this year. And then we will say if there is any evolution of the configuration. We are looking at some interesting, modern features.

TotalEnergies' Upstream/LNG Assets in Southeast Asia/Oceania
Country	Asset	Stake
Malaysia	Block 2K (operator)	34.9%
Malaysia	Block N (operator)	NA
Australia	Gladstone LNG	27.5
Australia	Ichthys LNG	26
Papua New Guinea	Papua LNG	40.1%
Source: TotalEnergies, Petronas

Q: How are inflation and supply-chain issues going to impact Papua LNG?

A: We have to be very careful with inflation and we are doing our best to keep capex where it should be. We have good interest from the supply chain on the project. On the upstream part, things are moving, and on downstream we have a good interest from industries. We will know next year, before FID, what will be the context. And as you can imagine, a project like this in the current time attracts a lot of interest from potential buyers.

Q: With carbon capture and storage (CCS) integrated into Papua LNG, how keen are customers to pay a premium for cleaner LNG given the current high prices and volatility?

A: There is interest from clients. We all have to go for a more decarbonized world, and we are doing a lot of efforts to decarbonize our own operations. As you may know, for all the decisions we take at TotalEnergies regarding our projects, we consider a $100 per ton of C02 equivalent price, except if there is a regulation in place which is already setting a high standard. So, we are targeting to reduce the emissions of our projects as much as we can, and this is what we are doing here with this Day 1 reinjection. This is also what we are working on for Ichthys [LNG] in Australia where we, together with our partners, have been awarded a CCS appraisal, a CO2 storage appraisal license in the Bonaparte Basin. We plan to do the appraisal work and see how we can store the native CO2 of Ichthys in this reservoir.

Q: What are TotalEnergies’ plans for monetizing CO2 storage capacity through CCS hubs in the region?

A: We have a clear CCS strategy and CCS ambitions on a global basis. We are working on CCS for our assets, with maybe the potential to do more if we are speaking of the Bonaparte Basin but at least to decarbonize our own assets. In Europe, we are working on several projects where we would store CO2 for other users. In a way, it’s the concept of a hub. We are already working on the Northern Lights project [in Norway]. We are also working on several others. We are targeting 10 million tons/yr of storage capacity by 2030.

Q: TotalEnergies has shown strong interest in deepwater assets in Malaysia. How does this fit in with your strategy?

A: We have been exploring for some time in Malaysia because there is potential. We are continuing this exploration effort. We found some interesting things. So, we are interested in these fields. We are pushing in terms of exploration, and we are drilling a well these days, the Tepat-2 well. This is what I will share for now on this topic.

Q: Besides Malaysia, which countries are the most attractive for upstream investments in Asia?

A: We have our current existing large positions in Australia as partners of Ichthys and Gladstone LNG. Regarding where we are pushing our effort, clearly our big topic in the region is to deliver on Papua LNG. We are progressing on that, and this is our big focus area. As you have seen, we are also exploring in Malaysia, and we also have exploration positions in Papua New Guinea.

Marc Roussot, Singapore

 

Reproduced with permission from Energy Intelligence Group