The PNG LNG project: The ultimate logistical success

The Spirit of Hela at the marine terminal in PNG.

The Spirit of Hela at the marine terminal in PNG.

In April 2014, ExxonMobil’s pioneering PNG LNG Project started producing LNG from its first train, with its first shipment leaving Papua New Guinea in May, en-route to Tokyo Electric Power Co. Inc. in Japan. Gas Today speaks exclusively with the PNG LNG Project Executive Decie Autin on the significant logistical challenges faced by the project, and how they were overcome to successfully complete the project ahead of schedule.

The PNG LNG Project is an integrated development that includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central Provinces of Papua New Guinea (PNG). The PNG LNG Project began construction in 2010, with over 700 km of pipelines connecting the facilities, which include the Hides Gas Conditioning Plant (HGCP) and liquefaction and storage facilities with capacity of 6.9 million tonnes per annum (MMt/a).

Joint venture participants in the PNG LNG Project include ExxonMobil subsidiary ExxonMobil PNG Limited as operator (33.2 per cent), Oil Search (29.0 per cent), National Petroleum Company of PNG (16.6 per cent), Santos (13.5 per cent), JX Nippon Oil and Gas Exploration (4.7 per cent), Mineral Resources Development Company (2.8 per cent) and Petromin PNG Holdings Limited (0.2 per cent).

Ms Autin reflects on the myriad achievements the project has made, saying “[Exxon] has constructed a project in the most remote, rugged, culturally complex and beautiful place on earth, on time and have done so in an environmentally responsible and culturally sensitive manner.”

“We’re proud to have completed the PNG LNG Project and to have shipped our first cargo to Asia ahead of schedule – there aren’t many resource projects in the region that can say that.”

Tackling the Papua New Guinean terrain was destined to be a logistical test, with much of the huge project spanning extremely remote areas of the country. The logistical challenges meant a lot of planning and thinking ahead to ensure materials and supplies were brought in on time, using a variety of methods, including road and by air.

Strategic planning and flexibility

Ms Autin admits that there was much scepticism in the successful completion of the Project, because of its formidable challenges.

“But we had a really strong project management team and workforce. We were flexible and able to adapt as we faced problems, and I think this approach led to our success,” she notes.

“Not only did we have a strong team, but we also worked in collaboration with contractors/subcontractors, stakeholders, the government of PNG and the communities where the Project operates.

“Without the support of these people and organisations, we couldn’t have done what we’ve done. We worked tirelessly to ensure that communities and the government were aware of what we were doing and could feel that they were a part of the project.”

Ms Autin also points to the importance of strategic logistical planning as a stepping stone to success.

“Most of the project infrastructure – the gas plants, pipelines, and the ships that are taking the gas to the market – consist of proven, fit-for-purpose technology. However, the logistics of getting these facilities into place, on time, in PNG proved difficult and this is where the need for strategic planning came in.”

For example, Exxon wanted to ensure drilling and construction contractors were not competing for the same limited existing logistics infrastructure in the field. It also wanted to provide flexibility and contingency by opening three logistics paths to the remote project areas:

  • The existing 800 km highway from Lae;
  • A route from the south through the Pai Inlet in the Gulf of Papua; and,
  • The establishment of an air bridge to the Hides conditioning plant by building an airfield at Komo to allow the use of Antonov cargo planes.

“Planning ahead to open up these three paths meant we were able to finish the Project ahead of schedule,” she says.

The formidable terrain

As predicted, the rugged terrain and high rainfall in the highlands posed many challenges to the project.

“In some parts of the pipeline, we had to airlift pieces of pipe in, and in other places we were laying the pipeline up very steep hills. At times, the weather posed a problem. The pipeline was probably the toughest part of the project,” admits Ms Autin.

Another barrier faced was how to get large and sensitive equipment to the Hides Gas Conditioning Plant, located in PNG’s Highlands. The 800 km Highlands Highway could not support big loads, particularly the bridges – of which there are 98 along the highway, many not rated for loads exceeding 50 t.

“After assessing many options, we finally decided to build an airfield which gave us the ability to bring in these large loads via Antonov aircraft.”

Building the Komo Airfield involved moving a lot of dirt and volcanic soils, while bringing in over 400,000 cubic metres of gravel and aggregate. In order to prevent the Antonov aircraft from slipping in heavy rain, grooves had to be saw-cut into the runway. The airfield needed 3,900 km of grooving along the complete runway surface, the same as cutting a groove from Perth to Sydney.

In total, 88 Antonov aircraft deliveries of heavy and sensitive equipment were flown into Komo Airfield.

Flow on benefits to community

The PNG LNG Project is the largest investment ever made in PNG, and is expected to have far-reaching impacts throughout the country.

“Economic indicators show that the economy will grow from the current 6 per cent to 21 per cent next year – which is a huge achievement for any country,” says Ms Autin.

“We’ve already seen that the project has encouraged further foreign investment in PNG, and several new projects are already in development. We hope to see this continue.”

In terms of community investments, Exxon’s focus areas are health, education and women’s empowerment.

In education, the PNG LNG Project has spent more than 13 million Kina across the Project area, which includes upgrades and repairs to schools, training for teachers, more than 1,500 locally made desks, and over 22,000 school packs.

“One program that’s close to my heart is women’s empowerment,” explains Ms Autin.

“One program we have supported for many years is the Global Women in Management (GWIM) program run by Plan International USA. Since 2006, we have supported many women to attend the training program which aims to strengthen women’s management, leadership and technical skills to advance economic opportunities for women.

“This program has been so successful, and we’ve seen many Papua New Guinean women return from the program and implement some amazing projects. It’s been so successful that this year we decided to hold the training program in PNG for the first time ever. This allowed us to reach many more women, and so far we’ve had 49 Papua New Guinean women participate in the program in total.”

Training a reliable workforce

Exxon has calculated that more than 55,000 people have worked on the project in total – over 21,000 people at the peak of production, and it estimates that during the long-term production phase, around 1,200 people will be in the workforce.

“Training our workforce – particularly our PNG citizens – has been a critical focus area,” says Ms Autin.

Since construction began in 2010, the Project has provided more than 2.16 million hours of training through 12,400 programs and trained more than 10,000 Papua New Guineans.

One of the milestone achievements of the Project has been the training of almost 140 operations and maintenance technicians who will operate the LNG facilities for the next 30 years. The first intake of technicians were trained for one year in Canada, and were involved in the preparation of the Project’s start-up and the production phase. The second intake of trainees began on-the-job training at the LNG Plant and Hides conditioning plant in early 2014, after returning from Malaysia.

As one of the most economically robust LNG projects in the region, it is clear that the benefits of PNG LNG will not only have a permanent and profound impact on PNG and its citizens, but also on the wider gas industry, who can learn from the success of this unique and logistically challenging project.

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