PAPUA New Guinea has formally approved moves by Australia-listed Horizon Oil to develop its Stanley gas condensate development project in the nation’s Western Province.

The company announced the PNG National Executive Council had approved the project, authorising Petroleum and Energy Minister Nixon Duban to sign a gas agreement with the company and its project partners, subsidiaries of Talisman Energy, Mitsubishi Corporation and Osaka Gas.

The gas agreement prescribes key rights and obligations of the State and licensees in respect of the Stanley Project, including the project fiscal terms and commitments to local content.

The agreement will also cover benefit sharing arrangements between project area landowners and authorises the start of the development forum required under the PNG Oil and Gas Act.

Mr Duban is expected to grant a petroleum development licence (PDL 10) and pipeline licence (PL 10) for the Stanley Project in mid-May.

The grant of PDL 10 is the final step to completion of Horizon Oil’s sale of 40% of its PNG asset to Osaka Gas and will trigger transfer to Horizon Oil of the balance of the sale proceeds plus adjustments of about US$77 million in total.