Future strategies for LNG use

THERE are exciting times ahead.
PNG, today, stands poised to develop its extensive gas reservoirs, a resource that many industrialised economies rely on for their energy source and will be turning to increasingly as the pressure builds up worldwide to turn to renewable and cleaner sources of energy.
With its resources not yet out of the ground for at least two years, PNG stands to reap a handsome harvest.
The big question is: How is it going to use this resource? Is it all for export as it did with its oil resource?
This question alone must guide PNG’s strategies for the future.
While PNG’s politicians and planners have been talking for months and months about Vision 2050, or the 2030 strategies and the medium-term development plan, little has been said about what is going to power all the development that is being talked about.
Hardly a whisper has been heard about how to power this new development drive.
In the end, it would seem that proceeds from the gas resource would be used not only to fund development projects but also to import energy into the country.
And, that would be a travesty.
PNG entered the exclusive club of oil-producing nations in 1989 with the first sale of oil from the Kubutu oil wells. Then Gobe, Moran and East Mananda contributed.
Today, 21 years on, Papua New Guinea, the oil producer, is a net importer of oil to power much of its diesel and petrol energy needs in the country.
From all the talk going on, it would appear that the same kind of approach is being taken on developing the gas resource.
Liquefied natural gas (LNG) from PNG will be exported to drive the industries of China, Taiwan, Japan and India but little thought has been spared for PNG’s own energy needs.
Look to Australia and New Zealand, our first world neighbours to the south and two of PNG’s closest friends and allies, for some guidance if you will.
Australia is a foremost producer of energy in the world; it being ranked first in production of uranium used to power nuclear power plants and of coal.
Today, with major gas discoveries in the northwest shelf and the Darwin LNG project, Australia will grow to rival some of the world’s largest LNG producers.
PNG will be one of those rivals.
But, Australia is not only looking to supply gas energy to the outside world. It is looking to supply sufficient energy for its own domestic needs, thereby creating Australian jobs in downstream processing and cutting out importation of energy.
Forecasts are that by 2020, Australia will produce four trillion cubic feet of gas which it intends to split roughly between LNG for export and the domestic market.
While Australia wants the benefit of selling LNG to the growing markets of Asia, and the rest of the world, it is the supply of clean energy to sustain Australian industry and home that is paramount. That is a fact that seems to have eluded PNG planners altogether or, if it has not, it has made any significant impact on them.
And, so, PNG’s sweet Kutubu crude is almost all gone and, soon, its gas will be going the same way – headed out of the country as raw exports to power somebody else’s industries.
By and by, PNG will import goods that have been made from the energy that it has supplied to the rest of the world.
Out in the Tasman Sea, 35km from Taranaki, New Zealand, a giant gasfield was discovered in 110m depth in 1969.
The New Zealand government took an active commercial interest in the field and formed an energy company, Petrocorp, which took out 50% interest in the Maui natural gasfield.
Two floating platforms were erected and natural gas and condensate were extracted from this field.
The gas is almost exhausted now and the government’s interest in the project has been sold to private interests but the government’s goal has been achieved.
Much of the gas from the field was used to supply the Motunui synthetic petrol plant, a project the New Zealand government referred to as “think big” project.
An onshore naptha refining project was also commissioned in 1999.
Today, New Zealand is one of the leading producers of clean energy, combing clean energy from gas, wind, thermal and other sources.
That is the example that PNG needs to emulate.
While the Maui reserves are dwindling, the government has put in place an energy strategy 2050 that is sure to make it one of the leading and self-sufficient producers of clean energy on earth.