Project worth billions

The National Main Stories

By DALE LUMA
THE P’nyang liquefied natural gas project in Western will be worth US$44 billion (about K151.1 billion) upon completion, says Prime Minister James Marape.
Marape mentioned this yesterday after the signing of the P’Nyang Gas Agreement between the State and the developer ExxonMobil Ltd with its affiliate partners.
The construction phase will begin after the completion of the Papua LNG’s construction phase around 2028.
Earnings from the project will start flowing in around 2032 or 2033, Marape said.
The Government secured a 34.5 per cent in equity shares – the highest ever the country will be getting in a LNG project.
“We aim high in any project harvest in our country, we wanted to earn anything between 60 per cent and 65 per cent in as far as project economics is concerned,” Marape said.
“That is government policy but different projects has different modality in as far as project cost structure and rate of return is concerned and Exxon came out really well for us.”
The country also benefits from a three per cent production levy, better calculations in equity and royalty.
Marape said P’nyang was sequenced according to the Papua LNG project in which the country would enjoy eight years of construction benefits from the two projects.
ExxonMobil PNG Ltd managing director Peter Laden said the signing of the agreement was an important milestone.
He said since the discovery of P’nyang more than 30 years ago, significant resources had been put into the gas field.
“The gas agreement unlocks the next phase of the life cycle of P’Nyang providing a clear framework for all stakeholders towards a future development,” Laden said.
“The ExxonMobil operated 4.4 billion cubic feet P’nyang resource proposes to deliver LNG by constructing new upstream facilities in the Western province linked to existing infrastructures downstream.
“The development plans to commence after the Papua LNG project supporting the government’s desire for sustained growth and investment in the decade ahead.
“P’nyang for the landowners is an independent project and landowner benefits will be provided under a future benefit sharing agreement,” Laden said.