Govt okays 2 gas-fired power plants

Business, Normal

The National,Friday 09th December 2011

TWO gas-fired power stations using PNG’s gas resources were among four projects approved by the government to address the on-going power problems in the country and the power the Freida River copper project.
Yesterday’s cabinet-approved projects were separate from a gas power plant being mooted by another state-owned entity to power the Wafi-Golpu project in Morobe province.
Minister for State Enterprises Sir Mekere Morauta said yesterday cabinet approved four proposals:
n Upgrade of Ramu hydro scheme;
n Gas power plant using the Mananda gas field, Southern Highlands province;
n Gas power plant at the Stanley gas field in Western province; and
n Purari dam and hydro scheme
 “Individually, they are very big projects that can add significantly to the generation capacity of the nation.
“Taken together, they are a giant leap forward in progress towards increasing our national energy capacity, providing economic opportunity and promoting national development.
“Most importantly, they can come on-line very quickly,” Sir Mekere said.
The Ramu and Mananda proposals would link into the Highlands-Morobe-Madang grid, as well as providing local power.
They would solve the power shortages in Lae and Madang, and provide excess electricity that would be available for new industrial, agricultural and domestic demand in Morobe and Madang provinces and across the Highlands.
PNG Power’s Lae-Madang-Highlands grid at present generated only 62MW of electricity.
The Ramu and Mananda proposals could increase total output to as much as 497MW.
“These projects have the potential to transform local economies as well as the national economy,” Sir Mekere said.
“They have the potential to transform the lives of hundreds of thousands of people in the long-term.
“They are opportunities that we cannot afford to miss.”
The Ramu project was being proposed and undertaken by the government through IPBC in partnership with PNG Energy Developments Ltd (PNG EDL), a 50-50 joint venture between PNG Sustainable Developments Ltd and Origin Energy of Australia.
This was the same group planning the Purari dam and hydro-scheme.
The Mananda and Stanley projects were being proposed by PNG EDL, and the government was considering buying an equity.
NEC approved a K45 million feasibility study for the Ramu project, which could increase the Ramu output from the current 45MW to as much as 325MW.
The first stage would be to repair and renovate the existing Yonki dam and power station.
The second is to complete the “Toe of Dam” project, which will generate power from water going over the existing spillway at Yonki.
The third was to build a new dam and powerhouse.
Cabinet directed IPBC to proceed with the feasibility study and agreed to take steps to designate the project as a “project of state significance”.
The Mananda gas-fired power project would link into the Ramu transmission system at Mendi.
Aside from feeding into the existing system, it could also supply large mining projects, and there was sufficient capacity for local rural electrification schemes.
The project would generate between 80MW and 150MW of electricity.
Under the proposal, PNG Power’ Ramu transmission lines could be transferred into a public-private partnership owned by the State and the private sector.
NEC noted the work being done by PNG EDL and IPBC to advance the project, and directed IPBC to investigate options for carrying out a transmission system PPP.
The third project discussed by NEC was for a gas-fired power station at the Stanley gas field – also proposed by PNG EDL.
The electricity would be supplied to the Ok Tedi mine, Kiunga and possibly to the Frieda River mine if its development goes ahead.
PNG EDFL is also looking at the potential to export excess power to West Papua.
They also estimated that the project had the potential to supply power through rural electrification schemes to about 50,000 people in Western province.
“There is potential for state equity in the project, and NEC had directed IPBC and Trea­sury to negotiate terms and to report back to NEC,” Sir Mekere said.
Cabinet agreed to targeted import duty exemptions for the projects.
Consideration would also be given to providing GST exemptions.
Cabinet also supported a proposal to develop the Purari hydro scheme, and endorsed an electricity industry policy.
Current work on improving reliability and increased capacity in the Port Moresby system was proceeding, and a submission on this was expected.