BSP welcomes gas deal

By DALE LUMA
THE signing of the fiscal stability agreement for the Papua LNG project between the Government, operator Total and its partners has been described as a most positive development which gives businesses confidence.
Bank South Pacific (BSP) chief executive officer Robin Fleming told The National yesterday that the agreement also provided more certainty to the Government in terms of financial planning.
“The signing is a most positive development and provides businesses with confidence that a project that all parties agree to and has significant national importance is now progressing,” Fleming said.
“This permits front end engineering work to accelerate.
“While a final investment decision may still be 12 to 18 months away, the signing of the agreement provides somewhat more certainty for the Government from a financial planning perspective.”
He said it was also good for businesses as they reviewed their own investment decisions that would contemplate an uplift in construction-related economic activity in two years.
“The construction phase in two years’ time will see more foreign exchange flow into PNG which at some time will see a floor in the downside movement of the Kina and will over time permit importers to have currency orders filled on demand.”
He said the banking sector would be required to support lending opportunities that could involve infrastructure development and retail activity.
“While the property and hotel sectors already have sufficient capacity to meet increased demand, there will still be certain sectors in the support industries that will benefit directly from Papua LNG-related activity.
“Landowner groups will be more involved with the projects as future beneficiaries of revenue and as service providers under local content requirements.”