PNG government vows not to rush LNG deal
Updated
The Papua New Guinea government has insisted it will not rush through the country's first multi-billion dollar liquefied natural gas project without consulting all affected parties. It comes after landowners raised concerns that they would be left-out of potential spin-off business activities. The developers, led by ExxonMobil, are expected to make a final investment decision by December this year.
But they can't do so until the government reaches an agreement with all the parties concerned.
Presenter: Firmin Nanol
Speaker: William Duma, PNG's Petroleum and Energy Minister
- Listen:
- Windows Media
NANOL: The PNG government has less than 6 weeks to secure the support of landowners impacted by the LNG project. PNG's Oil and Gas laws state that the landowners be invited to voice their concerns and come to an agreement on compensation
PNG's Petroleum and Energy Minister, William Duma, says the government will hold licensed-based benefit sharing forums to ensure the landowners and the developers are satisfied before the project begins.
DUMA: We have time frames to use so that we are in the position access partners and then make their final investigations, but at the same time we must also make sure that everything is done thoroughly and properly, so that we don't have difficulties with our landowners again in the future. Because we are required by law to ensure that all the processes that are set out in the Oil and Gas Act are followed and to ensure that our landowners are happy and also at the same time to ensure that our important partners are satisfied, so it is really not that straightforward. We will be having everything that is allowed under our existing laws to ensure that without our of course twisting and breaking laws, our partners will receive important project for our country.
NANOL: After the forums the government will draw up a Petroleum Development Licence, which will be given to the developers to make a final investment decision by December this year. Minister William Duma says the forums will bring landowners, developers and the government together to discuss how best they could help them participate in the project. He says landowners will also be invited to talk about how they could be involved in potential spin-off business activities.
DUMA: During or after the forum, a final decision is made to recognise either landowner companies on their own or umbrella landowner companies. After those companies are recognised, they can of course expect to involve themselves in various business opportunities that are available. So the reason why we do that is we want to ensure that no landowner company is left out. We want to make sure that all landowner companies are satisfied with the arrangement whether it be under the form of employer companies or individual companies. They must be happy, the men themselves must be happy. They must be satisfied that those landowner companies represent their interests.
NANOL: The government and the lead developer, ExxonMobil, are yet to come up with a final national content plan, which is a requirement for the project. Mr Duma again says the plan outlines the involvement of local businesses in the multi-billion dollar LNG project , but there are still some areas that needs to be ironed out.
DUMA: The national company concern is a plan that the developer releases its plans and how the level of business can participate in the business in the various levels of activities - like Level 1, Level 2, Level 3. Level 1 for instance, includes things like catering for instance, security for instance. Level 2 for instance would include things like construction of associated infrastructure like roads, clearing of sites, for instance, and Level 3 will include the construction of the LNG plant itself, which of course we all know we don't have that expertise. So the developer to make allowance for the possibility of a lot of businesses participating in those various areas.
NANOL: The developer's led by ExxonMobil are expected to make a final investment decision by December this year. The first shipment of gas is expected to be commissioned by 2013 or early 2014.
