PNG Government eyes law to keep some gas onshore

The national Government will soon make it mandatory under Papua New Guinea laws to ensure any future developers of liquefied natural gas (LNG) projects in the country to allocate 15 percent of gas they extract for local consumption.

After realising the Konebada Petroleum Park has been dormant for many years now because there has not been any gas allocated to be used in downstream processing by petrochemical companies investing in the park, Minister for Petroleum and Energy Nixon Duban announced on Thursday that the Government will soon push for a template agreement that will be endorsed by cabinet so it sets a stage that any future developer in this country will have to comply with that template agreement.

"Meaning that every time you sign an agreement, 15 per cent (of gas) must be locked in for the Government of Papua New Guinea and so you will have control over and you will make available for gas to electricity or you can make it available for petrochemical opportunities," Mr Duban said.

"So it is a very important step that this country has taken under the Government of Prime Minister (Peter) O’Neill and I think it will have a long term impact in our country in terms of growth, in term so four challenges and opportunities and furthermore it will be a very important landmark in our country’s economic growth."

This was welcome news for representatives from Japanese petrochemical company Sojitz, who said that with such mandatory allocations for gas for local consumption, their proposal for a petrochemical plant at the Konebada Petroleum Park would be a reality.

"Having a cheap gas allocation for the project will be a required condition for our project," said Naotsugu Koinua from Sojitz Corporation during a visit to the Konebada Petroleum Park site on Thursday.

"We welcome this news as having gas readily available will be the most essential requirement to make the project feasible."

It is understood lack of readily available gas for downstream processing has been delaying any firm commitments to invest at the Konebada Petroleum Park and with Minister Duban’s announcement, more companies that have been holding back will reconsider their investment decisions.

PNG Today/Post Courier