Pressure builds on PNG government over LNG Project

radionz, 21 November 2016

Papua New Guinea’s government is again under pressure from landowners with interests in the major LNG gas project.

LNG Project facility, Central Province, Papua New Guinea.

LNG Project facility, Central Province, Papua New Guinea. Photo: RNZI / Johnny Blades

A Beneficiary Group, comprised of landowners and provincial governments, has petitioned the government to ensure maximisation of the value of equity interest in the project.

The petitioners are from Hela, Southern Highlands, Western, Gulf and Central provinces across which the ExxonMobil-led Liquefied Natural Gas project spans.

They claim that new changes to a 4.27 percent equity interest in the project being introduced by state-owned Kumul Petroleum Holdings Ltd erode the value of their equity.

ExxonMobil's LNG Project cuts a swathe of development through Hela province in PNG's Highlands.

ExxonMobil’s LNG Project cuts a swathe of development through Hela province in PNG’s Highlands. Photo: RNZI / Johnny Blades

This, the Beneficiary Group says, breaches the terms of the Umbrella Benefit Sharing Agreement signed with over 60,000 landowners at the inception of the project in 2009.

Among 14 demands, the petition calls for the government to rescind a move to pursue vendor financing for the 4.27 percent equity.

The government of prime minister Peter O’Neill has been given until this week to respond.

Project equity in the name of affected landowners and provincial governments is managed by the state in a complex structure.

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Photo: RNZI/Johnny Blades

However, in the petition, the beneficiaries complain of a “prolonged lack of disbursement of benefits emanating from the PNG LNG project”.

Shiploads of the project’s gas product are being successfully exported each week to Asian markets.

However landowners says the state has not paid royalties and other entitlements; nor has the project released development levies to provincial governments.

Earlier this year, landowners in Hela blockaded a key conditioning plant at the project’s hub over their demand for long outstanding commitments from government.

Hides landowners met several times with the government to discuss outstanding LNG Project payments.

Hides landowners met several times with the government to discuss outstanding LNG Project payments. Photo: Supplied

Representatives of government re-confirmed that the commitments would be honoured, saying a process of verification of genuine landowners was holding up the payments.

The blockade was lifted but this new petition warns of a serious risk of disruptions to the project’s operations at any time by dissatisfied landowners.

The five provinces had entered into the project having secured a government commitment to helping them directly participate in commercialisation of their abundant LNG resources.

ExxonMobil's LNG Project cuts a swathe of development through Hela province in PNG's Highlands.

ExxonMobil’s LNG Project cuts a swathe of development through Hela province in PNG’s Highlands. Photo: RNZI / Johnny Blades

However angst is growing over the perception that the that has not honoured the social contract that it tied down with indigenous and tribal people in affected areas

The long term security of the project is unclear.

Pressure builds on PNG government over LNG Project was originally published on PAPUAPost.com

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