GAIL in talks with Interoil for stake in Papua New Guinea project

State-owned gas utility GAIL India today said it is talking to Canadian oil company Interoil Corp for a possible stake in its proposed liquefied natural gas (LNG) project in Papua New Guinea.

“We are examining the possibility of having a stake in the Papua New Guinea LNG terminal,” GAIL Chairman and Managing Director B C Tripathi told reporters on the sidelines of the 6th Asia Gas Partnership Summit in the national capital. Papua New Guinea last year granted initial approvals for the Pacific nation’s second LNG project, which would follow a plant proposed by an Exxon Mobil Corp-led venture.

The venture would cost about $5 billion for a plant producing 3.5 million tonnes a year of LNG, with shipments due to start in 2014. LNG is a natural gas chilled to liquid form for transportation by tankers to destinations not connected by pipeline.

“We are in discussions with Interoil...It is at a preliminary stage and I cannot say what stake GAIL can get,” Tripathi said. “A lot will depend on due diligence.” China National Offshore Oil Corp — China’s biggest offshore petroleum explorer, is already working with Interoil and the Papua New Guinea-owned Petromin PNG Holdings on commercial terms, for financing the government’s stake in the project.