THE ExxonMobil-led PNG LNG project has started production ahead of schedule as a result of using natural gas from the Hides fields in Papua New Guinea.

ExxonMobil said in late April that LNG production had kicked off after the project’s LNG plant cooled the gas to a temperature of -160 degrees Celsius.

The milestone was achieved following several months of commissioning and start-up activities and comes four years after construction on the US$19 billion project started.

ExxonMobil PNG managing director Peter Graham said the project team deserved to be congratulated on such a major milestone which had been achieved ahead of the original timeframe of later this year.

“Completion of commissioning activities and the first LNG production ensures the project remains on target for its first LNG cargo before the middle of 2014,” he said.

The projects start-up is being undertaken through a phased approach, with ExxonMobil to focus on continuing to ramp up production until the first cargo is ready to be loaded, which is anticipated in the coming weeks.

Meanwhile, work on the second train is progressing with LNG production from this unit is expected to start in the next several weeks.

PNG LNG partners welcomed the development, with Oil Search, which has a 29 per cent stake in the project, hailing the start of production as excellent news and a big milestone for not only the company but for PNG.

“We would like to congratulate the operator, ExxonMobil PNG, on this achievement,” Oil Search managing director Peter Botten said.

Based on this new information, Oil Search expects its 2014 production to be in the range of 14.5 – 17.5 million barrels of oil equivalent (mmboe), compared to the previous 13-16 mmboe guidance range, assuming a continued smooth commissioning and ramp-up process.

Santos Managing Director David Knox congratulated ExxonMobil on the successful delivery of first LNG following first condensate production in late March.

“Delivery of the PNG LNG project is a key step in Santos’ strategy to become a major LNG supplier to Asia,” he said.

“PNG LNG will quadruple Santos’ LNG production once the project reaches full output.”

Santos has a 13.5% interest in the project. Other co-venturers include affiliates of ExxonMobil, the National Petroleum Company of PNG, JX Nippon Oil & Gas Exploration, Mineral Resources Development Company and Petromin PNG Holdings.

PNG LNG, which is expected to produce more than 9 trillion cubic feet of gas over its lifetime, is an integrated development that includes gas production and processing facilities in the Southern Highlands, Hela, Western, Gulf and Central provinces of PNG.

More than 700 kilometres of pipeline connect the facilities, which include a gas conditioning plant in Hides and liquefaction and storage facilities near Port Moresby with production capacity of 6.9 million tonnes per annum.