Image courtesy of Exxon Mobil.

Exxon Mobil Corp’s LNG facility on Papua New Guinea has started shipping natural gas, Exxon said Monday.

Work began on the PNG LNG project in 2010.

The plant is one of several in Southeast Asia and Australia that will deliver gas to Asia users.

It marks a further turn away from Middle East suppliers for Asian LNG customers.

Last week China signed a deal to buy up to $400 billion of gas from Russia delivered by a cross-border pipeline.

The PNG LNG project could more than double Papua New Guinea’s gross domestic product, Dow Jones said.

About 435 miles of pipeline connect the facilities, Exxon said.

The gas is produced in remote parts of PNG’s mountains and has to be transported to across highland terrain down to the sea shore, and finally to a processing site 250 miles away.

Exxon said the PNG LNG facility will produce more than 9 trillion cubic feet of gas over 30 years.

The first shipment went to Japan’s Tokyo Electric Power Co., or Tepco.

It’s still unclear whether PNG “will be able to avoid the so-called resource curse that befalls many developing nations that suddenly receive an influx of cash,” Dow Jones said.

“The big problem is whether the country uses the revenue from PNG LNG to improve living standards here and equally distribute the benefits,” said Jenny Haward-Jones of the Sydney-based Lowy Institute.

In addition to ExxonMobil PNG Limited, co-venturers in the PNG LNG facilities are Oil Search Limited, National Petroleum Company of PNG, Santos Ltd., JX Nippon Oil & Gas Exploration Corp., Mineral Resources Development Company (representing landowners) and Petromin PNG Holdings Limited.

Customers in addition to Tepco for the LNG are likely to be China Petroleum and Chemical Corp., also known as Sinopec, Osaka Gas Co., and Taiwan’s CPC Corp., Dow Jones said.


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