Tag Archives: PNG LNG

Gas-powered project to be constructed

 

The National Executive Council has approved a 57.78 megawatts gas-powered project to be constructed near the LNG site outside Port Moresby.

 

 

The announcement was made by Minister for Public Enterprises and State Investments, William Duma, on Friday (Nov 10) during the ground-breaking ceremony of the Kilakila substation in Port Moresby.

 

He said the project will be constructed by an independent power producer (IPP), NiuPower Limited, a joint venture company owned by Oil Search Ltd and Kumul Petroleum Holdings Ltd.

 

 

“The electricity will be sold to PNG Power Ltd (PPL) under a power purchase agreement between PPL and NiuPower.”

 

 

Duma said the project was identified as a critical and special key infrastructure project with significant impact in meeting Port Moresby’s demand for power as well as the potential to reduce PPL’s retail tariffs throughout PNG.

 

 

“The total cost of the power plant project alone is valued at PGK375 million (US$115.1 million), to be equity funded by NiuPower to design, procure, install and commission the project,” said Duma.

 

 

He stated that in order to transfer power generated by the gas fired power plant to the Port Moresby grid, PPL will be constructing a double circuit 66 kilovolt transmission line from the power plant site to a new Gerehu substation.

 

 

“The transmission line and Gerehu substation, including any associated transmission and distribution lines expansions, will be funded by PPL at a cost of K60 million.”

 

 

Duma said the unit cost for producing power through gas compares favourably to other existing and alternative energy sources in Port Moresby.

 

 

“The average power tariff or unit cost to PPL is US$ cents per kilowatt-hour subject to fuel prices and escalation, and this is the cheapest compared to existing PPL generating sources.”

 

 

Duma said the gas fired project will be PPL’s first cost effective IPP ever negotiated by PNG Power Ltd.

 

 

Author: Meredith Kuusa via Loop PNG

Royalties on track: Pok

November 8, 2017
By GYNNIE KERO.

Source: The National

THE Government has resumed the task of identifying landowners, particularly in the pipeline (Gulf and Southern Highlands) and upstream (Hela) areas of the PNG LNG project.


Petroleum Minister Dr Fabian Pok said once the landowner beneficiary identification (LOBID) process was completed, landowners would receive their royalty payments of more than K150 million deposited at the central bank.

 


Teams from the department left for one of the sites this week to begin the exercise.
“My department started the LOBID process in 2013-2015. Substantial work has been done in various licence areas,” Pok said.

 


“The current exercise which starts this week aims to conclude it. We appeal to all landowners and leaders to assist with the LOBID process so that the benefits distribution can commence as was done at the LNG plant site (in Central).

 


“We also encourage the landowners to withdraw any legal proceedings that are currently on-foot. Other landowners who might be contemplating new proceedings should not do so.

 


“We are looking at a minimum of four weeks to complete the LOBID process.”
Pok said landowners of the Papua LNG project would have to be identified before the project could begin.

 


Kumul Petroleum Holdings Ltd managing director Wapu Sonk clarified that court cases that halted the landowner identification process in recent years did not directly involve royalties.

 


“All court cases we talked about are really on BDGs (business development grants), IDGs (infrastructure development grants), high impact projects, those side benefits,” he said.
“The core benefits from the project are royalties, development levy and free-carried equity that is managed by the Mineral Resource Development Company.”

LANDOWNERS WILL BE PAID: MANO

 
By SHIRLEY MAULUDU 
Source: The National
 
MINERAL Resources Development Company managing director Augustine Mano says landowners will be paid their benefits once certain processes are carried out following the verification of clan-vetting information.
Petroleum Minister Fabian Pok said yesterday said the clan-vetting exercise had resumed for some areas of the PNG LNG project.
Mano said there were two sorts of benefits for the landowners.
“The royalties are with the Central Bank (Bank of Papua New Guinea) and the equity is with us (MRDC),” he said.
“This process is very critical for us to release both the royalties and equities because ultimately we’ll pay the royalties and equities.
“This clan-vetting exercise can take up to four weeks, depending on the status on the ground. After that, we’ll have a ministerial determination.
“After the ministerial determination, then we will open the accounts. After we open the accounts, then we will have elections of respective directors and chairmen of pipeline and PDL (petroleum development licence) areas. After that, the benefits will be paid.
“It is important that landowners must understand that the same precedent we did with plant site landowners will also be applied to the pipeline and PDL.”
He is hoping that the process would be sorted out before Christmas.
Meanwhile, Pok said following the successful distribution of royalty benefits to the plant site landowners, the department was focusing on the completion of the clan-vetting exercise in the other impact areas.

Govt To Unwind LNG Revenue Conditions

 

 

BY MATTHEW VARI

 

Prime Minister Peter O’Neill says his government is in the process to relook at agreements to see foreign revenues from gas sales that find their way into the country.
Responding to the foreign currency woes currently faced, he said with the continuous sale of LNG, a precursor for foreign currency inflows – the agreement signed by past governments were designed unfairly for the country to keep the funds overseas. Mr O’Neill said this when East Sepik Governor Allan Bird asked why the sale of a shipment of gas at US$50 million, every three days, could not alleviate the forex issue.

 
“They have allowed exporters and proponent, developers to park all these revenues overseas. While we are making the exports they have been allowing them to park the money overseas and the money is not coming back into the country.”

 
“That is the reason why we are not receiving enough foreign currency even though we are making the exports,” Mr O’Neill said.

 
“Agreements have been designed very unfairly for Papua New Guinea. There have been of course smart economists in the past always thought that the fear of the Dutch disease, what they call that there is too much foreign currency in the economy.”

 
He said this fear has resulted in the parking of funds outside of the country through the agreements signed by the previous regime that took the lead in the LNG negotiations.
“We are trying to unwind that, talking to some of the project developers that they must bring in foreign currency that is rightfully Papua New Guinea’s back into the country.”

Kumul Holdings to account for sale of stake

By HELEN TARAWA of The National 

 
DEPUTY Prime Minister and Treasurer Charles Abel says Kumul Petroleum Holdings Limited  will report on the net outcome of the government’s 10 per cent stake in Oil Search Limited that it has divested.

 
Abel told The National that KPHL was holding the debt and the shares.
The debt has been cleared and shares sold.

 
“The collar loan protected KPHL from some of the share price drops,” Abel said.
“They will calculate and report on the net outcome of the transaction.”

 
KPHL managing director Wapu Sonk said they were preparing for the PNG LNG project expansion, the Papua LNG, the power project and their own investments.

 
Responding to claims of the sale of shares as a rescue package for the government, Sonk said the government did not pay anything.

 
“This is not a rescue package because this was never on the government’s balance sheet,” Sonk said. “The government wasn’t paying anything. It was Kumul.

 
“We’re preparing for the PNG LNG project expansion, Papua LNG, the power project, our own investments going forward. So it’s got nothing to do with the PNG Government.”
KPHL on Friday announced that it had sold its shares in Oil Search Limited and had ceased to have any interest in the firm.

 
Sonk, who announced the decision in the presence of KPHL chairman Sir Moi Avei, said it would continue to be responsible for managing the State’s 16.77 per cent equity in the PNG LNG project.

 
“As a close partner of Oil Search in PNG, we look forward to continued cooperation on our numerous projects.”

 
Sonk explained that the UBS collar loan was not a normal loan.

 
The value of the parcel of shares on any day supports the loan itself which, in this case, was approximately 149 million shares.

 
A collar is a protective-options strategy that is implemented after a long position in a stock has experienced substantial gains.

 
Sir Moi said KPHL had made about K100 million (A$35 million) as a result of the transaction.

 
He said the current oil and LNG price environment and projected  long-term views indicated that oil prices would remain about the same for the next few years.

O’Neill And Exxon CEO Meet In US

Source: Post Courier

 

 

Papua New Guinea and ExxonMobil are working together to expand Investment and create more jobs, Prime Minister Peter O’Neill said from the United States last night.

 

Mr O’Neill has expressed confidence in the ongoing strength of the commitment by ExxonMobil in Papua New Guinea’s economy, saying there is scope for greater investment and job creation from the company that is one of the largest foreign investors in Papua New Guinea.

 

He made the comments after meeting ExxonMobil chairman and chief executive officer, Darren Woods, and Senior Vice President, Jack Williams, at the company’s global headquarters in Dallas, Texas, on Thursday.

 

“The contribution that the PNG LNG Project has made to our economy has been substantial, and this will continue to grow,” Mr O’Neill said.

 

“ExxonMobil has demonstrated their continued commitment to Papua New Guinea through the delivery and management of the PNG LNG project, together with ongoing exploration activities.

 

“We look forward to continuing to partner with ExxonMobil to advance projects and create more jobs for Papua New Guineans.”

 

ExxonMobil PNG Limited is the operator of the US$19 billion PNG LNG Project, the largest private sector investment to date. Additionally, ExxonMobil is working with partners to expand LNG processing at the existing PNG LNG plant site near Port Moresby.

 

“Papua New Guinea is an important country in ExxonMobil’s global portfolio, and we are committed to making our business successful for all parties,” Darren Woods said.

 

“We are committed to working with the government to support economic growth and provide long-term, sustainable benefits to the people of Papua New Guinea through workforce, supplier and community development programs.

 

“ExxonMobil also congratulates Papua New Guinea on hosting APEC in 2018.

 

“We are working closely with PNG’s APEC organisers to make the event a success for the country.

 

“I look forward to returning to PNG to participate in the APEC CEO Summit.”

Oil, Gas can bring in K60bil more: Botten

August 18, 2017  /The National / Business

By JACKLYN SIRIAS
OIL Search Limited has estimated that the oil and gas sector will attract more than K60 billion in investment in the next seven years if given the right environment.

 
Managing director Peter Botten highlighted during the prime minister’s breakfast in Port Moresby yesterday(17/08/17) the potential that the oil and gas sector had to materially and positively impact the economy.

 
“Papua New Guinea is in a tremendous position to expand the LNG production as there are more discovered proven probable gas resources set by now than before the PNG LNG first initial sanction,” he said.

 
Botten said more than 10tcf (trillion cubic feet) is available to under-ride new investments in the Elk Antelope on the PNG LNG field and the P’nyang field.

 
“With the right environment, oil and gas production can more than double over the next five to seven years,” he said.

 
Botten said the potential investment of more than K60 billion in developments, appraisal, and exploration was possible in this time frame.

 
“Construction can lead to over 20,000 new jobs with significant spin-off economic benefits will flow from those developments,” he said.

 
He said there were many issues to resolve to make this happen.

 
“The prerequisite for success is developers engaging with government, landowners, and indeed the whole country to demonstrate fair value distribution for all parties has been achieved from existing projects,” he said.

 
Botten said this required developers to work with the state to help deliver infrastructure, address service delivery, and support both economic and social developments in the country.

 

Photo Courtesy of www.afr.com