Papua LNG set to bring in K75bil

By PETER ESILA
PETROLEUM and Energy Minister Kerenga Kua says the Papua LNG project will bring in K75 billion over the next 20 to 25 years of production life.
Kua said the announcement of the start of the front end engineering design (Feed) was good news for a struggling Papua New Guinea economy.
“We have not issued a development licence but we will, we need the support of the people of PNG and all stakeholders,” he said.
“PNG and its stakeholders will be able to make about K75 billion, over the life of the project, that is a lot of money.
“If we are going to be earning K75 billion over the life of the project, then you can see, it will be a major impact on our revenue.
“It will be spread over, the estimated life span of the Papua LNG and is about 15 years based on the current reservoir, so they will crank up production slowly, but when they reach the peak production for 15 years, after 15 years, the production will slow down because the resource reservoir will start to diminish, so the diminishing period for the project is for a 10-year period.
“The benefits will be projected over a 20 to 25-year period when we can receive substantial benefits out of the project. You can spread it over a 20-year period and you will see what annual gains we will make.
“That benefit is inclusive of what comes to the State, what goes through Kumul Petroleum Holdings Ltd (KPHL) and what comes to the State directly as levies, to the landowners as royalties, to provincial governments, all of us put together, we are going to be collecting and sharing in the next 20 years or so.” The estimated cost to develop the project (or capital expenditure) is US$10 billion (about K35.2 million) and the cost gross revenue estimated to be generated within the project life span is approximately US$61.8 billion (about K217.6 billion).
The net project cash-flow for the parties are US$22.5 billion (about K79.2 billion) and US$6.4 billion (about K22.5 billion) for the joint venture and the State respectively.