Gas project to be standalone


PETROLEUM Minister Kerenga Kua says the P’nyang gas field in Western will be developed together with Train Three as an integrated standalone gas project under the terms of a separate Gas Agreement.
But he said the US$13 billion (K43 billion) Papua LNG and US$19 billion (K64.49bil) PNG LNG projects-type concessions would not be readily available to P’nyang.
Kua made these remarks following the passing of the various legislative amendments yesterday to give effect to the gas agreement for the Papua LNG project that was signed in April.
Kua thanked Prime Minister James Marape for his support with clearing the Papua LNG project agreement after a three-month long review process.
Referring to fiscal terms applying under the Papua LNG project and the PNG LNG project gas agreements, Kua said the three-month review had revealed that the Papua LNG project was a slight improvement on the PNG LNG in terms of financial accommodation for state equity back-in plus additional concession agreed as to national nontent, pipeline third party access, option for KPHL to own the project pipeline and option for national entities to own LNG tankers.
However, Kua said the Government expected the P’nyang project agreement to be different and needed to deliver substantially better fiscal and economic benefits for the country than the Papua Project.
He said while Total SA was a new entrant in PNG and the concessions given to Papua project made more sense, the balance of the partners of that project were the same in PNG LNG and in P’nyang who had been benefiting from the generous concessions offered in the PNG LNG project.
Kua said although the State had the option of deferring the P’nyang gas project development to when the new and oil and gas legislation and revised fiscal regime was introduced in 2020, there were compelling considerations that merited having the P’nyang gas agreement negotiated and signed under the existing the Oil and Gas Act 1998.
These included the need to stagger the construction and development of Papua and P’nyang projects so that the country could enjoy an extended eight–year economic boom as opposed to four years from a single project.
In addition, the State was a participant and wanted to benefit from the economic savings brought by the combined engineering, financing and construction of the three trains for Papua and P’nyang.
Kua also announced the national executive council decision to appoint the members of the SNT which would be headed by chief secretary Isaac Lupari, and deputised by Kumul Petroleum Holdings managing director Wapu Sonk.
Kua said the Government expected to sign the P’nyang gas agreement next month.