Japan funds PNG LNG project
Updated
The Japan Bank for International Cooperation (JBIC) has agreed to fund the Papua New Guinea government's equity in the multi-billion dollar Liquefied Natural Gas project. A visting Japanese delegation also announced plans to buy up to 50 per cent of the LNG output to meet its own energy needs.
Presenter: Firmin Nanol
Speaker: Kohei Nakanishi, Managing Executive Officer, Japan Bank for International Cooperation and Sir Puka Temu, Deputy Prime Minister, Papua New Guinea.
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NANOL: Officials from JBIC have signed a Memorandum of Understanding, following talks with senior PNG government ministers in the capital, Port Moresby. The Managing Executive Officer, Kohei Nakanishi, and officials also visited oil and gas fields in the PNG Highlands and the proposed site of the LNG processing plant. Gas will be piped 20 kilometres from the PNG Highlands to a LNG processing plant north-west of Port Moresby. PNG's State Enterprises Minister, Arthur Somare, says Japan's involvement is significant and will help the government speed up attempts to get the project started. He says Japan will help fund the PNG government's equity in the project and has agreed to buy half of the LNG gas once the project is completed. Managing Executive Officer, Kohei Nakanishi, says Japan's traditional LNG suppliers are likely to decrease their supply, forcing Japan to look elsewhere for energy.
NAKANISHI: We depend on almost 100 per cent of our energy as an import. So far, we have heavily depended on Indonesia, one of the biggest sources for energy import to Japan. But they are likely to be declining their export to Japan. So that is why we, Japan, are looking for new supply source of LNG, so that I think that PNG is likely to be a new LNG supply source.
NANOL: The Japanese delegation also praised the benefits sharing agreement, which exists between the PNG government, the provincial governments concerned, landowners and the developers. The agreement clearly sets out how benefits from the LNG project that should be shared between all parties, which Kohei Nakanishi says was another reason they decided to help with the funding.
NAKANISHI: I was very much impressed that the parties concerned got together and reached agreement in a democratic and transparent manner. It is a quite memorable one.
NANOL: PNG's Deputy Prime Minister, Sir Puka Temu, says more than 6 million tonnes of LNG output will be destined for Japan, which will help improve the living standards of the people of PNG.
TEMU: Your receipt has given us more assurance of the support that JBIC will offer to this important project in our country. We are assured that this project is moving on in the right direction and so your visit this time it has given us a lot of certainty with the progress of this project. It is only 53 days away from that important countdown to a final investment decision time.
NANOL: So far, partners of the PNG LNG project have welcomed the investment by Japan and its' Bank for International Co-operation. The developers, led by Exxon Mobile, will make a final investment decision in early December this year, while the first shipment of LNG output is expected to be commissioned by 2013 or early 2014.
