Oil Search Limited (ASX:OSH) shares rise on PNG LNG project’s BP deal

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The Oil Search Limited (ASX: OSH) share price is 0.55% higher at $9.10 after announcing the PNG LNG project has agreed to a deal to supply liquefied natural gas to a unit of British oil giant BP.

Oil Search holds a 29% in the ExxonMobil-operated PNG LNG project and the adjacent P’nyang field in Papua New Guinea.

The agreement, starting this month, will provide BP with about 450,000 tonnes of LNG annually over an initial three-year period, rising to about 900,000 tonnes for the following two years, Oil Search said in a statement on Friday.

Oil Search did not give any value for the deal.

“(The move) takes the total contracted volumes from the project to approximately 7.5 million tonnes per annum,” Oil Search Managing Director Peter Botten said.

The company also said that, on behalf of the project, ExxonMobil was in negotiations with several other parties over an additional 450,000 tonnes per year of supply.

The agreement comes a month after Oil Search announced a similar deal with PetroChina for 6.6 million tonnes per annum.

Earlier this month, Oil Search resumed operations to produce oil at the Agogo production facility, which was knocked out by a major earthquake in Papua New Guinea in February.

The Oil Search Limited share price has gained 16.7% since the beginning of 2018, compared to the S&P/ASX 200 Index, which has gained 4.53%.

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Lauren Surplice is a keen follower of the stock market, investing in individual companies and funds. She follows the daily stock market news, covering the ASX stocks that are moving the markets. You can contact Lauren at laurens@thecapitalclub.com.au