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| Govt okays LNG fiscal terms: PM | |
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By ISAAC NICHOLAS0 PRIME Minister Sir Michael Somare told Parliament that the Government has agreed with the fiscal terms on the liquefied natural gas (LNG) project with the project proponents. Sir Michael said the fiscal terms were agreed to between the State and ExxonMobil last week. He said the fiscal or tax terms of any project remain the biggest issue because it determines what shares of the revenue generated will go to the State as the tax collector and what shares of the revenue will go to the project. “The terms agreed represent value for the State and address the important issue of accessing the windfall revenue that is currently being enjoyed by the oil and gas industry whilst ensuring that the project proponents receive an appropriate return on what could be a US$10 billion (K28.6 billion) investment.” In his statement to Parliament on the LNG project, Sir Michael said he was informed that on the strength of the agreement with the State on fiscal terms, ExxonMobil has commenced its preliminary logistical preparations for FEED. “Funds have been transferred, people have been engaged and the marketing personnel have begun introducing Papua New Guinea LNG to the rest of the world. “We will not falter and procrastinate. In that regard, I have directed the whole of Government to focus on finalising the technical terms of the project so we can execute the gas agreement. “Let me state this clearly - I expect that early next month, the State and ExxonMobil and its project partners will be moving into FEED. “We will announce to the world that PNG can conduct commerce on a global arena, and set the benchmark for other projects that will most definitely materialise from the establishment of the PNG LNG Project.” Sir Michael said after his re-election he announced that the commercialisation of the vast gas resources would be the number one priority of this Government and would underpin the future economic and social aspirations of the people. “I said this at a time when we were recovering from the demise of the PNG-to-Australia pas pipeline project and we faced the uncertainty of our headline mineral projects which for the most part have carried the national budgets over the decades.” He said since then, Government officials had been exploring with the industry other commercial alternatives for PNG gas. “We have focused on the LNG which has grown in popularity in world energy markets and is enjoying the buoyant prices in the rest of the oil and gas industry.” Sir Michael said the PNG LNG project, led by ExxonMobil and its partners Australian Gas Light (AGL), Oil Search Ltd, Santos, Nippon Oil Exploration and the Mineral Resources Development Co (MRDC), is a world-class gas project that would serve as the foundation for future gas commercialisation. |
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