By LEMACH LAVARI
Kumul Petroleum Holdings Ltd (KPHL) and Mineral Resources Development Company (MRDC) have partnered to build a power plant in Port Moresby to increase electricity supply.
The two companies signed a memorandum of understanding yesterday to build a power plant at the cost of US$70 million (K218 million).
KPHL managing-director Wapu Sonk, pictured, said this would be the second independent power-producing company KPHL had invested in within the national capital.
He said the first company,NiuPower, was still under construction.
It is from a 50-50 partnership with Oil Search Ltd.
Sonk said the partnership with MRDC was also on a 50-50 agreement.
He said the joint venture was yet to have an official company name.
Sonk said the new power plant would supply 45 to 50 megawatts into the Port Moresby grid.
He said the station would take up to six months to build and would be located at the same area as the NiuPower station.
“Between Kumul (KPHL) and MRDC, we are representing the country in the commercial space in the oil and gas industry” Sonk said.
“We ared exploring opportunities in downstream processing and further utilising our gas so we can develop skills, domestic industry and keep money onshore.”
MRDC managing-director Augustine Mano said the joint venture is another source of income for the landowners, whose equity was managed by the company.
He said the royalty benefits for landowners changed with global oil prices.
Mano said by participating in the joint venture with KPHL, landowners could sustain their levels of benefits.
He said the electricity supply would be generated by gas.
“We want to make cheaper and cleaner power available”, Mano said.
He said this would provide competition with Niupower and lower the cost of doing business in Port Moresby.
As with Niupower, the new company will supply electricity to retailer PNG Power Ltd which will then sell the electricity to its consumers.
By LEMACH LAVARI