THE Government of PNG’s big mistake is not pricing for individual gases in the LNG.
The biggest of mistakes was the price bundle.
LNG is comprised of 12 gas constituents or less.
The actual composition of LNG will vary, depending on its source and on the liquefaction process.
In all cases, the major constituent will be methane with small percentages of the heavier hydrocarbons such as ethane, propane, butane and pentane.
In addition, small quantities of nitrogen may be present.
Our (PNG) price bundle was entered into at wholesale price instead of pricing on individual gas constituents.
If GoPNG had done this, the total value of the PNG LNG would have gone into trillions of Kina and not in billions as we are led to like and believe today.
One LNG ship today is valued at US$150 million (K488 million). It would be a different story if we had priced individual gases at world market pricing and rates.
Secondly, publish the LNG contract agreement publicly so we study the clause that allow for review cycles … every three, five years, or what.
Why is the LNG contract agreement a secret to date?