Gunvor and InterOil Sign LNG Supply Agreement

US- based InterOil and Gunvor Singapore have signed a Heads of Agreement to supply Liquefied Natural Gas (LNG) amounting to 1Mt annually from the Gulf LNG Project located in Papua New Guinea.

The signing ceremony was presided upon by the Prime Minister of Papua New Guinea, Peter O’Neil, Gulf Governor Havila Kavo and other ministers in order to show support for the Gulf LNG Project and to ensure that the stakeholders receive LNG revenue by the year 2014 to 2015. The Gulf LNG Project will consist of the Antelope and Elk gas fields and the liquefaction and related facilities that will be built by Liquid Niugini Gas, which is a joint venture company between Pacific LNG and InterOil.

The Head of Agreement is not binding on both the parties and lays down the terms and conditions for the purchase and sale of 1 Mt of LNG annually for the duration of 15 years starting from 2015. Pacific LNG and InterOil are in the process of completing a Sales and Purchase Agreement with Gunvor by the end of 2012. According to the CEO of InterOil Phil Mulacek, the company already has Head of Agreements for 2.3 Mt per annum, which is equivalent to 50% of its initial LNG volumes. The company hopes to garner further Sales and Purchase Agreements for financing the infrastructure and cover debt for the Gulf LNG Project.