PM urged to endorse Papua LNG agreement

National

THE Opposition is calling on Prime Minister James Marape to endorse the Papua LNG agreement to avoid worsening legal and economic prospects.
Opposition Leader Patrick Pruaitch is appealing to Marape to keep his promise to honour agreements signed by previous governments and to give the green light for the US$13billion (about K43.2billion) Papua LNG project.
“Abrogation of the Papua LNG agreement signed in April will jeopardise prospects for PNG’s economic recovery and perpetuate the O’Neill-government legacy of falling wages and employment levels,” he said.
Petroleum Minister Kerenga Kua and Marape have been critical of the Papua LNG deal signed by the O’Neill government, but neither has publicly spelled out exactly what they want to change,” he said.
Pruaitch said: “It was officially announced, prior to the secret talks in Singapore, that Cabinet had approved the previously signed Papua gas agreement and that some minor issues could be sorted out in about a fortnight. That was four weeks ago.
“The question has to be raised whether the prime minister now intends to renege on his earlier promise that agreements signed by former governments would be honoured and whether, despite prior Cabinet approval, this government will not honour the Papua LNG Gas Agreement.
“The end result of these actions will be a perpetuation of the economic malaise facing this country. Thousands more workers will lose their jobs and falling wages will be a reality for many thousands of workers, as it has in recent years.”
Pruaitch said it was clear that the Papua LNG agreement was an improvement on the landmark PNG LNG Project agreement:

  • Through the addition of a two per cent production levy that will flow to the national government as soon as exports start;
  • through a more satisfactory calculation of the royalty rate; and,
  • The domestic market obligation, which will see five per cent of gas from Elk-Antelope allocated for domestic use.

Pruaitch said at this stage it appeared that the additional profits tax requirement for the PNG LNG Project was superior to the APT terms for Papua LNG, but this would need to be clarified.
It is understood the prime minister and petroleum minister have not raised this issue in the current impasse.
The Opposition leader said the PNG LNG Project involved a very good agreement by the former Somare government and he was confident Papua LNG would be just as beneficial, especially since landowner issues and royalty payments would be resolved before commencement of production.
He warned that cancellation of the Papua LNG agreement could have very damaging consequences for the PNG economy and the government, which was struggling with cash flow issues.

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