State launches K375mil gas-fired power plant

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A 57.78 megawatt gas-fired power project at a cost of K375 million was launched at the PNG LNG site yesterday.
Minister for Public Enterprises and State Investment William Duma, who launched the project, said it was part of the Government’s 100-day plan. It will supply electricity to boost the current Port Moresby grid.
Duma said the project was to be constructed by NiuPower Ltd, a joint venture company owned by Oil Search Ltd and Kumul Petroleum Holdings Ltd as an independent power producer and to sell electricity to PNG Power Ltd under a power-purchase agreement between PNG Power Ltd and NiuPower.
It was identified as a critical and special key infrastructure project with significant impact in meeting the capital city’s power demand as well as the potential of reducing PPL’s retail tariffs throughout Papua New Guinea, and one of the key projects included in the Government’s 100-day plan.
PPL will be constructing a double circuit 66kilovolt transmission line from the power plant to the site at a new Gerehu substation to transfer power generated by the gas power plant to the Port Moresby grid.
“The unit cost for producing power through gas compares favorably to other existing and alternative energy sources in Port Moresby,” Marape said.
“The average power tariff or unit cost to PPL is K2.5 (US 8 cents) per kilowatt-hour subject to fuel process and escalation and this may be the cheapest compared to the existing PPL generating sources.
“The gas-fired project is one and may be the first most cost-effective IPP negotiated by PNG Power Ltd.
“We must all work together to ensure that there is a shift from diesel-generated power to gas-fired power which is cleaner, cheaper and more efficient.
“It is now time for the Government to introduce the domestic-market obligation policy which will enable all the LNG projects, excluding the 9 TCF gas committed for the PNG LNG project specifically to allocate gas to be used for power generation in the Highlands, the Gulf region and the rest of PNG as well as downstream processing for DME methanol, fertilisers and other by-products.