Gulf leaders stand firm on LNG processing

Main Stories, National

The National, Friday July 19th, 2013

 THE Gulf provincial government is adamant that its natural gas resources will be processed within the province and not in other parts of the country.

This means that the developer of the proposed Gulf LNG project will required to build and operate a liquefied natural gas processing plant in Kerema.

Governor Havila Kavo, Kikori MP and Labour and Industrial Minister Mark Maipakai and Kerema MP Richard Mendani stressed this point in a joint statement in Port Moresby yesterday.

In a show of solidarity for their people, the three leaders issued the statement after a meeting with senior executives of InterOil at the Ela Beach Hotel.

“This is the firm position of the provincial government on behalf of its people and will not change even if a new developer comes into picture,” the leader said in a statement.

“We reaffirm the provincial executive council decision on Dec 17, 2012. This decision was further ratified unanimously by the members of the provincial assembly on Dec 18 in line with the wishes of the people of Gulf.

“Since the LNG project agreement was signed between the Liquefied Natural Gas Ltd (LNGL) and the State in 2009, InterOil had continuously failed to honour its commitments under the agreement.”

Kavo added: “The poor performance of InterOil and its failure to honour key terms under the 2009 deal was relayed to the InterOil board chairman Dr Gaylen Byker, chief executive officer Dr Michael Hession and vice president corporate development and government Isikeli Taureka in the meeting.”

The leaders said that InterOil’s commitment had been less than forthcoming and the final affront was when InterOil failed to make a final investment decision (FID) by the required June 24 deadline this year as required under the 2009 agreement signed with the Government.

They also remained unmoved on the “no pipeline” policy for their oil and gas.

The province has major gas reserves at Antelope and Elk gas fields in the Baimuru district.

InterOil and LNGL were the development partners under the 2009 agreement with the State and the provincial government to develop the gas reserves.

The partners have since brought in ExxonMobil, the LNG project developer, and are in negotiations on developing the Elk/Antelope resources.

Kavo, Maipakai and Mendani agreed that an LNG project would be the single biggest economic development in Gulf and would underpin the successful implementation of the province’s Vision 2020 objectives.

“We will not let this opportunity pass or go to waste.”