PNG Parliament clash over rising Papua LNG costs and fuel storage fears

Papua New Guinea Parliament turned tense this week as Ialibu-Pangia MP Peter O’Neill questioned Petroleum Minister Jimmy Maladina over rising costs in the Papua LNG project and reports about the possible sale of key fuel storage facilities.

The exchange brought attention to growing concern in PNG over the financial strain of the multi-billion kina gas project and the country’s long-term energy security.

Ialibu-Pangia MP Peter O’Neill questioned Petroleum Minister Jimmy Maladina over rising costs in the Papua LNG project and reports about the possible sale of key fuel storage facilities.

Mr O’Neill, who played a central role in the 2019 agreement with Total Energies, challenged the increase in project costs from US$11.9 billion to US$14.5 billion, or about K62 billion.

He said changes to the original agreement had delayed progress and could result in the State giving away billions in potential benefits.

“If we had stuck to the original agreements, we should be in production today,” Mr O’Neill said during a supplementary question.

The former prime minister called on the government to explain what benefits had been gained through renegotiations to justify the delays and rising costs, suggesting the State could be carrying more than one-third of the total investment.

In response, Mr Maladina said negotiations were still ongoing and the final cost figures had not yet been settled, adding that government support would be far less than the US$3.5 billion figure raised in Parliament.

He said any revised arrangement with Total Energies would go before Cabinet for approval and indicated he would review earlier negotiations before delivering a full statement later this week.

Attention then shifted to national security concerns after Mr O’Neill raised reports that Puma Energy’s storage facilities could be sold to the United States government.

“Is this the only one in the country that we have to sell?” Mr O’Neill asked.

Mr Maladina said Puma remained the main storage provider in PNG but he was unaware of any negotiations involving the US government.

“I don’t know whether the US government is negotiating with Puma,” Mr Maladina said.