ExxonMobil and PNG Government to Develop Domestic Gas for Electricity Generation

PORT MORESBY, Papua New Guinea – ExxonMobil PNG Limited, operator of the PNG LNG

Project, and the government of Papua New Guinea have reached an agreement to supply up to

20 million cubic feet a day of domestic natural gas for 20 years to support government plans to

improve the capacity and reliability of the country’s power supply.

The agreement is in addition to an existing gas commitment for Hides domestic power

generation.

• Memorandum of understanding includes framework to provide domestic gas for power

generation for Port Moresby and Hides

• PNG LNG to provide up to 25 megawatts of electrical power for Port Moresby for near term

use

• State to award a petroleum development license for P’nyang field .

“This agreement enables a reliable long-term supply of natural gas to support Port Moresby’s

urgent power generation needs,” said Peter Graham, ExxonMobil PNG managing director.

Under a memorandum of understanding, a portion of the natural gas supply allocated for

domestic use will enable PNG LNG to provide up to 25 megawatts of electrical power, or about

20 percent of Port Moresby’s current generation capacity, for an interim period while the

government addresses long-term power generation options. The remainder of the gas supply will

be used to fuel a new state-owned gas-fired power generation unit expected to be located near

the LNG Plant outside of Port Moresby.

The agreement provides for the award of a petroleum development license and associated

pipeline licenses for the P’nyang field in order to provide access to the long-term natural gas

reserves needed for power generation, and to enable expansion of the PNG LNG Project, which

could include the development of a possible additional train.

Esso PNG P’nyang Limited, the operator of the P’nyang field and an ExxonMobil subsidiary, and

its coventure partners will commence preparations to drill a P’nyang appraisal well within two

years of the awarding of the petroleum development license.

Preparations for appraisal drilling are anticipated to commence in 2015, subject to progress of

technical work, permitting and budgeting.