A historic day for the country

 YESTERDAY, May 14, 2014, the first liquefied natural gas was loaded onto the first specially built vessel, Spirit of Hela, which will set sail for Taiwan, China and Japan. 

It was a momentous occasion for all concerned.

For the American energy giant ExxonMobil, the PNG LNG Project is yet another significant footprint in this part of the world following similar investments elsewhere. 

For some of the minor project partners, this is the first time to venture into LNG. 

For the Papua New Guinea Government the sale of the first gas is a triumph be­cause it had been working overtime to ensure it met the demands of the project schedule and budget.

The traditional resource owners, the custodians of Gigira Laitepo had witnessed several weeks ago the spirit of the eternal flame depart its home for the LNG plant outside Port Moresby.  

And it will soon leave for foreign lands.

Yesterday’s event was a milestone for the country’s largest natural resource project undertaken to date.

We commend the project developer, the Government, shareholders and other sta­ke­holders involved in the realisation of the project. 

We commend the thousands of workers, most of them Papua New Guineans, who toiled over the past four years of the construction phase to complete this massive project ahead of schedule.

From the day when gas was first discovered in the country, to the beginning of discussions, through the failed PNG-Queensland gas pipeline proposal to the entry of ExxonMobil and the start of the PNG LNG Project, The National has followed the story untiringly.

It has not been positive news and a rosy ride for the project developers and government. 

Along the way there has been a fair share of criticism over matters such as the LNG agreement, employment, contract allocations and landowner concerns.

Questions over the integrity of the project have been raised following the Jan 2012 Tumbi landslip that buried an entire village. 

It was alleged that a nearby quarry operated by the project triggered the disaster, a charge which ExxonMobil has denied. Another significant setback was when the project announced a potential cost blow largely due to foreign exchange costs.

After yesterday’s joyous occasion, those and other minor hiccups in the project construction phase, should now be consigned to history though not to be forgotten altogether but looked to as vital reference points. 

What the country expect­antly looks forward to is greater possibilities now opening up with the export of LNG. 

Although the LNG agreement makes no provision for local commercialisation of the LNG, that has not completely shut out the government from negotiating with the project developers for possible use in electricity generation.

Prime Minister Peter O’Neill has announced in parliament that the Government has been in talks with ExxonMobil and indications were that sometime soon, natural gas powered turbines could replace ageing diesel generators to produce electricity in Port Moresby. 

Another positive effect of the success and financial returns of PNG LNG project would be a sort of catalyst for others in the exploration and planning stages.

InterOil and Total are de­veloping PNG’s second LNG project using the Elk and Antelop fields, in Gulf, while work is continuing at the Stanley gas fields by Horizon and Talisman.

LNG, though expensive to extract, once available, simply opens up a world of possibilities for the country, not only in terms of export revenues but for domestic use and downstream processing. 

Elsewhere in the world, LNG is used for residential and commercial needs, in in­dustry, electricity generation and even as fuel for transportation. 

A milestone has been achieved at the country’s first LNG project.  

People’s attention may now be shifted to developments on the Gulf and Western Province gas fields. 

ExxonMobil and its partners have been trailblazers in LNG development here and covered geographical, social and legislative territory hitherto unknown.  

This leaves a challenge for those who will follow and naturally they will be expected to be different, perhaps improving on the first project’s failures or oversight.