Landowners’ actions are bad for everyone

LANDOWNERS from Hides 4 must understand that the closure of the LNG project will have severe consequences not only to themselves, but also to the whole of PNG in terms of economic growth and development.
Unlike oil, LNG is a new form of energy and does not have a readily available global market.
Well before a developer even thinks of developing a field or reserve, it must consider securing an arrangement with LNG buyers.
The trade of LNG is then comple­ted by signing a sale and purchase agreement between a supplier and receiving terminal, as well as a gas sale agreement between a receiving terminal and end-users.
The developer of the PNG LNG project, ExxonMobil, and the state have gone through these things and ironed out the agreements well before deciding to develop the Hides, Juha and other fields to commercialise the huge gas reserves. 
The responsibility of extracting, refining and transporting the LNG rests solely with ExxonMobil and its joint venture partners including the government of PNG, and not the buyers, be it the Chinese, South Koreans or Japanese.
Therefore, it is important that the timeline set for the first delivery of LNG to these buyers is adhered to.
Otherwise, the buyers may terminate the agreements and everything will go to waste.
We know that the state has already borrowed heavily to fund not only its equity but also the additional 4.22% landowners equity in the project.
If it comes to a stop now, the state will have to repay that huge loan amount and it may end up costing us in terms of government services such as education, health and perhaps even lead to a tax increase.
It will also give us a bad name and investors will no longer invest here.
The LNG project reignited interests in the PNG petroleum industry along with other projects now waiting to come on stream for production.
Just imagine the consequences the closure of the LNG project will have on an economy overly dependent on revenues from the petroleum and mining sectors.
Landowners will have the option to exercise their extra 4.22% equity come 2016 and will benefit greatly from that.
They must stop these narrow-minded, rent-seeking attitudes as their actions not only affects Exxon-Mobil, but other Papua New Gui­neans as well.
Landowners should look at the bigger picture and benefits coming their way once the project reach the production phase.
They must stop interfering with the progress of the project.

Concerned citizen
Port Moresby