Address non-fiscal issues: Pruaitch

The National Business

THE Government has been urged to include non-fiscal issues during talks on the proposed construction of three additional LNG trains using gas from P’nyang, in Western, and Elk-Antelope, in Gulf.
Opposition Leader Patrick Pruaitch said the Government should not make the Apec Leaders’ Summit be the deadline for the conclusion of a fiscal agreement.
Prime Minister Peter O’Neill last month said they wanted to conclude the fiscal terms before November.
He had said it was a “good opportunity to do that because most of the global banks and financial institutions are going to be attending the CEOs’ summit in November” during Apec.
Pruaitch in a statement said it had taken 11 months of negotiations in 2008 to conclude the PNG Gas Agreement, which laid the foundation for the development of the US$20 billion (K65bil) PNG LNG Project.
“As a pioneering project involving natural gas found decades ago, the emphasis during fiscal negotiations in 2008 was the reintroduction of an additional profits tax so that any windfall gains would be shared by all stakeholders,” he said.
“However, the unexpected fall in gas prices has meant public expectations from this project has not been fulfilled. I am sure the Government is looking at fine-tuning these fiscal measures to maximise PNG’s financial returns. However, a range of non-fiscal issues also need to be addressed to ensure that a second world scale LNG venture is closer in line with the nation’s aspirations.”
Pruaitch said issues that should not be repeated in the second LNG Project include:

  • Future resource projects should only begin construction after landowner groups associated with the projects are identified with agreements concluded on benefit streams they will enjoy;
  •  Through a possible oversight, ExxonMobil, as operator of the PNG LNG project, has been exempted from Bank of PNG regulations. This must be avoided at all costs for future LNG and other resource projects as it impedes PNG sovereignty and the government ability to track resource sector foreign exchange transactions.