Smit Lamnalco signed up for PNG LNG

Smit Lamnalco has secured a 10-year marine support and towage contract covering ExxonMobil-led LNG export terminal operations in Papua New Guinea, representing the  first formal service agreement to be won under the service company’s new name and identity.

The contract, to provide tugboats and crews to assist berthing and un-berthing of LNG carriers, is worth approximately US$120 million over the period, which could be extended to 25 years.

The PNG LNG project is one of the Asia Pacific region’s most significant opportunities to tap new LNG sources. Ultimately, it is expected to produce over nine trillion cubic feet of gas for export. Already, four major customers are committed to accepting LNG produced: Chinese Petroleum Corporation, Taiwan; Osaka Gas Company Limited; The Tokyo Electric Power Company Inc.; and Unipec Asia Company Limited, a subsidiary of China Petroleum and Chemical Corporation (Sinopec).

Shoreside, the project involves the development of liquefaction, storage and handling facilities 20km northwest of Port Moresby with capacity to export 6.6 tons per year from 2014. Over 700 km of pipelines will connect to operations offshore in the Gulf of Papua. Terminal construction is being overseen by the BAMClough joint venture between BAM International and Clough Ltd.

The Smit Lamnalco agreement specifies deployment of four newbuild RAstar 3200-class 65 tonne bollard pull Azimuth Stern Drive tugs to provide escort and LNG terminal towage services. The RAstar design, from Robert Allen, is distinguished by its hull form, which has been proven to provide significantly enhanced escort towing and sea-keeping performance.

In line with its strategy of developing expertise locally, Smit Lamnalco’s new vessels will operate under the PNG flag. Smit Lamnalco is also committed to ensuring that local staff onshore and local seafarers on board the ASDs will play a key role in operations.

“PNG is a proud seafaring nation and we are committed to creating local job opportunities, ” said Paul Grizell, Smit Lamnalco General Manager Australasia. “Over time we intend to hire nationals to operate on our vessels, trained to international standards. Timely asset deployment and crew training standards played a key role in ExxonMobil entrusting us with this contract.” 

Smit Lamnalco will also establish a dedicated operation in PNG. “As in other markets, Smit Lamnalco will draw on its experience in cultivating strong ties with local interests in order to support our service offering , ” said Mr Grizell. “We are firmly committed to matching our international standards to local needs.”