PNG LNG due for final decision

Updated December 7, 2009 18:29:55

The developers of Papua New Guinea’s multi-billion dollar Liquefied Natural Gas or LNG project, are expected to announce a Final Investment Decision on the project this week. The developers led by Exxon Mobil have set December 8 as the date when they would announce a final decision to go ahead with the project or not. But as all stakeholders wait eagerly, there’s some uncertainty about the final outcome due to landowner concerns.

Presenter: Firmin Nanol
Speakers: Kutubu PDL 2 Spokesperson, Hami Yawari; Lawyer, Mark Nasil; ExxonMobil Managing Director, Peter Graham

NANOL: The LNG Project is expected to fuel PNG’s economy to grow by 3 per cent when the planned construction phase starts in 2010.

But certain landowners from the PNG Highlands where much of the gas will be extracted have not yet signed the Licensed Based Benefit Sharing Agreements.

Some landowners from the Kutubu Petroleum Development License – PDL 2 areas in the Southern Highlands also claim they were left out of the Forums.

Spokesperson, Hami Yawari claims the developers and the government excluded genuine landowners and appointed people who do not represent majority of the Kutubu PDL 2 area.

He says they will go to court to nullify the signed agreements.

YAWARI: As far as we are concerned, the Department of Petroleum, Energy and the state has already invited us to attend the meeting and by not letting us to come to the meeting, and getting certain people in there to discuss and get the forum going and signed, I think that is not for best interest of the project and our landowners, their views has not been taken care, has not been discussed in the meeting and we have never participated in the forum. So now we are going to court to nullify it. Whatever they have discussed in that forum, because we have never attended the forum.

NANOL: His lawyer Mark Nasil says the landowners were allegedly refused entry, when they were legally entitled to air their views at the benefit sharing forums.

NASIL: They were not allowed to attend the forum and certain individuals were arguing the process and many landowners chairman did not represent their group in signing the benefits they are in agreement, that is the indication they gave and they are filing 100 plus affidavits to confirm that agreement in PDL 2 was not done properly, and not in the interest of all the landowners in Kutubu. On that basis, we are instructed to go to court and file proceedings to nullify that agreement in Kutubu and it will served this afternoon to state and whoever the defendant named.

NANOL: The developer ExxonMobil says all project impacted landowners are being included.

Managing Director Peter Graham told Pacific Beat earlier this year all project impacted landowners are key to getting the project off the ground.

He says the developers are working towards the timeline to make a final decision on December 8th.

GRAHAM: It is important to us again on a number of fronts and one from the licensed grant perspective, but two, we look to these forums to give us a very clear indication of support from landowners, so it’s important from a security perspective, security of investment, and we get a clear demonstration and read from these forums that the people, the landowners with the project impacted areas are behind the project and they are comfortable with the sorts of benefits that will be derived from the project. It’s not the only requirement that is in front of us to get a final investment decision later this year. This is one important factor that does need to be in place, as I said, not least of which the minister cannot grant the licenses until these forums have been held.

NANOL: PNG Prime Minister Sir Michael Somare flew into the Kutubu and Hides gas areas to sign the agreements with the PDL 1 and PDL 2 areas but landowners snubbed him.

Landowners refused to sign and he returned to Port Moresby.

Petroleum and Energy William Duma is reportedly considering using ministerial powers to determine the kind of benefits landowners who refuse to sign the Benefits Sharing agreements would get.

He has asked landowners from the Kutubu PDL 1 and 2 plus others who have not signed to agree to what is being offered to them.

About nine Licensed Based project impacted areas must put pen to paper before there can be investor guarantee and security.

The first LNG cargo from the project is expected to be shipped by 2013 or early 2014.

The projects lead developer, ExxonMobil has already signed a gas Sales and Purchase Agreement with China’s oil and gas company, Sinopec.

Sinopec has agreed to purchase up to two million tonnes of gas over a 20 year period.

Firmin Nanol-Port Moresby.

5 thoughts on “PNG LNG due for final decision

  1. The pipeline groups including gulf& central provinces have signed. The project areas, gases producing area that have signed are Gobe PDLs, Kutubu PDLs and now its the Hides areas which is remaining.

    The deal should be closed soon with all landowners signing. Today is the D day for Exxon to make the FID. Fingers crossed!!!

  2. FID is a GO!! hooray….but maybe only after the gas buyers signed into the project. LBSA is not an issue, my view, because the government could still use the ministerial powers to decide the benefits…bit like the FID was dependent on the commercial values, not landowner issues!!!

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