BARNABAS ORERE PONDROS
AN important step towards maximising landowner participation in the multi-billion kina PNG LNG project was concluded yesterday with the signing of agreements between two landowner firms and the operator in Port Moresby.
The Service Outline Agreements (SOAs) set out the commercial terms under which the project’s engineering, procurement and construction (EPC) contractors will engage landowner companies to provide services.
The signing of the SOA was between the PNG LNG project and two landowner companies – Hides Gas Development Company Ltd and Laba Holdings Ltd.
Signatories to the SOAs are the landowner firms, Esso Highlands Limited, an ExxonMobil Corporation subsidiary, and PNG LNG project operator, on behalf of the project partners which include the PNG Government.
These SOAs document the terms and pricing structure under which each landowner company and the PNG LNG project agree to do business during the next five years.
The agreements cover the services, such as labour, equipment hire, catering and freight, which each landowner company can perform in their respective geographic location.
Hides Gas Development Corporation is the umbrella company representing the Juha, Hides, PDL 1, PDL 2, Angore, Komo Airstrip and Penaria Pipeline landowners in Western and Southern Highlands provinces.
Laba Holdings Ltd represents the villages of Papa, Boera, Lea Lea and Porebada near the LNG plant site near Port Moresby.
“These service agreements are an important step towards landowner companies securing business opportunities with the PNG LNG project,” Peter Graham, managing director of Esso Highlands Limited, said.
“The agreements set out the commercial terms with which the project’s EPC contractors will engage landowner companies to provide services,” he said.
There was a positive, cooperative atmosphere among the landowners and the PNG LNG project representatives at the signing that took place at Esso Highlands Limited’s office in Port Moresby.
Representatives from both landowner companies spoke of the importance of the PNG LNG project moving forward.
The project has now completed eight of 11 such agreements planned.
Eight SOAs have already been signed with Gobe Freight Services, Kikori Oil Investments, Gobe Field Engineering, Kutubu Security Services, Kutubu Catering Ltd, Maka Investment Corporation Ltd, Laba Holdings Ltd, and Hides Gas Development Company.
Overseas contractors have been invited to bid for five competitive EPC contracts.
EPC1 is for telecommunications, EPC2 is for the offshore pipeline, EPC3 is for the LNG plant, EPC4 is for upstream facilities (including the Hides gas conditioning plant), and EPC5 is for the upstream infrastructure and onshore pipeline.
Each of these contracts includes provisions for subcontracting work to landowner companies, and the PNG LNG project will work closely with the selected EPC contract firms to help them achieve this objective.