LNG’s forex boost

ABOUT K2.5 billion was injected into the country’s foreign exchange market, contributing to a strong appreciation in the kina, Peter Botten says.
Botten, the Oil Search managing director, said during the construction phase of the PNG LNG project, around 15 per cent of the US$19 billion (K62.9 billion) investment was in kina.
“And that K2.5 to K2.6 billion was falling into the country. This was injected into the local foreign exchange market over time contributing to very strong appreciation in the kina,” he said.
“Obviously, if the investment slowed and then stopped, we went down to a much lower level.”
Botten said the next phase of the LNG investment would not quite reach the same peak as the PNG LNG.
“It will actually be sustained. The investment will be sustained over a much longer period which will have much more impact on the level of foreign exchange and availability of currency,” he said.
He said investment for the PNG LNG was from 2009 to 2014. The next phase will consist sustainable investment for about 10 years.
“It won’t reach the same peak but (over) a much longer period.”
On the development of the Oil Search share price, he said it had doubled which demonstrated the value of successful delivery of the project over that period of time.
Botten said although there were ups and downs in the price, the value was great.