Oil Search Limited gained momentum on PNG gas project’s PetroChina deal

PNG LNG Project co-venturers sign mid-term sales agreement with PetroChina: Oil Search Limited’s (ASX: OSH) stock edged up on July 20, 2018 to A$8.63 (3:30 PM AEST) after the company being the PNG LNG Project co-venturer signed a mid-term LNG sale and purchase agreement (SPA) with PetroChina International (Hong Kong) Corporation Limited (PCI), to supply LNG from July 2018. This mid-term SPA is for a supply of approximately 0.45 million tonnes of liquefied natural gas (LNG) per annum (MTPA) over a three-year period. With this SPA, the total contracted volumes from the Project reaches to 7.0 MTPA, and 6.6 MT of PNG LNG’s annual output is already committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC. ExxonMobil Corp holds a 33.2% stake in PNG LNG, while OSH has a 29% interest. Meanwhile, the first sale under the new agreement is expected to take place this week. The SPA is the first mid-term sale to be finalised for the supply of up to 1.3 million tonnes per annum (in total) from PNG LNG over a period of up to five years. On the other hand, STO’s total revenue for 1H 2018 fell by 18% to US$557 million due to impact of an earthquake in February that led to a shutdown of the plant, but it resumed production in mid-April. OSH stock has risen 10.30% in three months as on July 19, 2018 with boost in oil prices.


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