THE PAPUA NEW GUINEA GOVERNMENT has put InterOil Corp on notice that it will cancel its proposed liquefied natural gas project.
A notice from the Department of Petroleum and Energy given to InterOil through an “unofficial channel” said an agreement to build the $6 billion plant will be cancelled.
InterOil will meet with the government this week to discuss the project, its chief executive officer Phil Mulacek said.
Mulacek said the project is caught in a political “silly season” with PNG due to hold parliamentary elections in late June.
“The prime minister’s office has not shown any intention to cancel the project and we intend to fully abide by the terms of the 2009 agreement,” Mulacek said.
The LNG plant is being built adjacent to InterOil’s refinery and is expected to begin liquefaction by 2015. The company has already spent $81 million on its construction.