Agreement signed between Oil and Gas developers and Shareholders in PNG

Kumul Petroleum Holdings Limited, yesterday, signed strategic agreements with two Japanese companies to develop and sell Papua New Guinea's oil and gas resources.

A heads of agreement with LNG Japan and a Memorandum of Understanding with Metal One Corporation were signed on the fringes of the country's first ever Energy Summit held in Port Moresby, yesterday.

KPHL and LNG Japan now form a joint venture aimed at purchasing and selling PNG's LNG.

KPHL is an existing shareholder in the multi-billion-Kina PNG LNG project and this arrangement would enable it to enter into the LNG market.

Managing Director Wapu Sonk said the signing of the agreement is strategic and also very critical in Kumul Petroleum taking a step forward in taking part in marketing some of the LNG together with partner LNG Japan.

"The heads of agreement will allow the companies to start working on the joint venture going forward with the PNG LNG project to take advantage of some of the spot market.

"The long term contracts are fixed, but there is opportunity in taking up some of the spot market cargoes and selling them to Japan and other markets around the world,Mr Sonk said.

"LNG Japan has experience in the business and KPHL as a shareholder in the PNG LNG project, we would like to work together and build on each others experience, he said.

President and Chief Executive Officer of LNG Japan, Norikazu Onishi, said the firm is happy to be here as a strategic p52artner with the country not only in oil and gas but also in other areas such as education.

KPHL also signed another milestone MOU with Metal One Corporation to participate in the Western Pipeline Project.

This now enables Metal One Corporation to partner KPHL in its plan to build the proposed pipeline to transport gas from the stranded field in Western Province to Port Moresby.

Managing Director, Wapu Sonk, said Metal One would supply steel and finance for the proposed pipeline announced in December.

Deputy Division COO Metal One Corporation, Atsushi Saiki, said they have been contributing to PNG's economic growth through the supply of steel products for the petroleum industry through their mother company, Sojitz Australia.

He said under the MOU with KPHL, they will provide high quality Japanese line pipes for the Western Province pipeline.

"We have an MOU with Kumul Petroleum Holdings Limited regarding Japanese high quality line pipe supply for the strategic pipeline which will be very important for effective utilization of undeveloped precious oil and gas resources that you have in your country in Western Province,"Mr Saiki said.

The milestone agreements were witnessed by Minister for Petroleum and Energy, Nixon Duban, and Japan's Ambassador to PNG, Satoshi Nakajima.

Speaking at the event, Mr. Duban said the arrangements are a confidence in their government.

"For them to allow themselves to be part of Kumul in this very important joint venture arrangement shows confidence in our government and confidence in our resources that we have that we can also supply the energy market in the world.

"On behalf of the government and the Prime Minister Peter O'Neill would like to express our gratitude to the delegation who have come.

" We have, in couple of the big conferences around the world, we've marketed PNG as an investment destination.

"While there are critics who are downplaying our ability as a nation, while people are criticising the government, you can see the kind of work that's attracting interest from the international community,” Mr Duban said.

"PNG is an investment destination that will be there for a very long time because of the strategic position that we enjoy closer to the border of the Asian market which has a high energy demand."

Ambassador Nakajima, on the other hand, described the agreements as a significant milestone for both countries.

NBC News / PNG Today