PNG Minister confirms no agreements on Hides Gas project
Updated
The Papua New Guinea Government confirms that no agreement has yet been reached with the landowners of the proposed multi-billion dollar Liquid Natural Gas Project in the Southern Highlands Province, as the landowners threaten a Bougainville-style revolt if their demands are not met. PNG Petroleum and Energy Minister William Duma says there's still a lot of unresolved issues they need sort out on the benefits agreement.
Presenter Sam Seke
Speaker: PNG Petroleum and Energy Minister William Duma
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SAM SEKE: Land owners in Papua New Guinea's Southern Highlands and those living in Port Moresby are threatening to disrupt the $11 billion liquid natural gas project. One tribal leader from Hides, Andreas Wabiria, is warning of a Bougainville-style uprising if their demands are not met. The land owners want 30% equity in the project and proper identification of land owners for royalty benefits. The project to be developed by Exxon Mobile in the Hides region is in its initial engineering stage. It's expected to be completed by 2014 but so far the Petroleum and Energy Minister, William Duma, says the parties have still not agreed to a national contents plan. These would include identifying local companies to be involved in low-level activities such as catering services and the construction of the planned site. The Energy Minister, William Duma, admits the issues they're dealing with under the benefit sharing agreement are not easy to resolve.
WILLIAM DUMA, MINISTER FOR PETROLUEM AND ENERGY: We need to tell our land owners how much they will be getting in terms of royalties, then how much will they pay to their Government in terms of development levy. How much can they expect to get in terms of understanding agreement and how much can they expect to get in terms of equity in the project. This, I think, we still haven't resolved. It's ongoing discussions, positive discussions but we want to make sure that we do not leave any stone unturned, we don't have any problems and we want to do it thoroughly and fairly.
SAM SEKE: Mr Duma says the Government wants to ensure maximum benefits for the locals in target areas.
WILLIAM DUMA: In the LNG plan there are three types of activities that will be generated by the project. You've got the first phase which is the low-level activity like provision of catering services, security guards, provision of food, fresh food, for instance, transport, those sort of things and then you have the next lot you have things like construction of the LNG plant site, infrastructure leading to the roads, the improvement of roads, the construction of power facilities and then you have the most complicated one is the construction of the LNG plant itself. These are only done by two or three companies in the world. And also the construction of the pipeline.
SAM SEKE: PNG Minister William Duma says the local companies elected to participate in the Hide's LNG gas project must be able to live up to the high standards of the developers ExxonMobile.
WILLIAM DUMA: Exxon have their own standards. They have very high standards. They want to give those activities to ournationals, but they want to help our nationals, you know, meet their requirements. For a land owner company, how many years this land owner company has been in operation, what are the what is the financial status of the company, who are the directors, what have they done with the money they received from the Government so far? Can they be trusted? Are they reliable people? Exxon cannot afford to allow a delivery to come late or something not to be delivered so they want to make sure that whoever they give contracts they do it on time, they do the Exxon way.
