PNG Government Vows to Safeguard Landowner Benefits Under K70 Billion Gas Development

PNG Prime Minister James Marape has moved to reassure Papua LNG host communities that their agreed financial benefits will remain intact as the country prepares for a major new investment in its petroleum sector.

Speaking to approximately 800 landowner representatives at Parliament House, Mr Marape said the Government had not sacrificed the interests of landowners or provincial administrations in negotiations over the US$14.5 billion Papua LNG development. The project, valued at about K70 billion, is expected to bring construction spending, employment and business opportunities to Papua New Guinea.

PNG Prime Minister James Marape has moved to reassure Papua LNG host communities that their agreed financial benefits will remain intact as the country prepares for a major new investment in its petroleum sector.

The gathering included representatives from Gulf and Central provinces, Members of Parliament, former government leaders and executives involved in the project. It provided an opportunity for the Prime Minister to discuss the expected economic returns and explain the implications of the development arrangements for government revenue.

Mr Marape recognised the roles played by Sir Moi Avei and the late Grand Chief Sir Michael Somare in laying the foundations of PNG's LNG industry. He said the country's resource development achievements had depended on contributions from successive governments, leaders and communities.

He rejected the idea that one individual should receive sole credit for advancing Papua LNG.

“There is no one champion; all of us are champions in this work,” he said.

Mr Marape said the project would build on the existing PNG LNG operation and help establish a stronger platform for further developments, including P’nyang LNG.

He said Papua LNG offered opportunities both during construction and throughout the production period, with the construction phase expected to stimulate economic activity before long-term gas revenues materialised.

“This is a monumental Project. We want to win from Construction Dollars, as well as Production Dollars. Two different Dollars,” he said.

The Prime Minister indicated that construction could commence around mid-December, with development expected to progress towards 2029–2030.

A key issue addressed during the meeting was the projected reduction in certain State petroleum tax receipts from PNG LNG. Mr Marape said about K5 billion in tax revenue expected between 2029 and 2032 would be forgone under the arrangements associated with Papua LNG.

He explained that the change was connected to depreciation costs from the new development, which would otherwise begin affecting revenue from 2033. The Government's position, he said, was that the immediate tax adjustment had to be considered alongside the economic activity generated by the much larger construction investment.

The Prime Minister maintained that the arrangement would not affect the agreed financial entitlements of landowners and provincial governments.

“In everything we do, in our negotiations with Total and Exxon Mobil, we have never compromised Landowner and Provincial Government Revenue,” he said.

Mr Marape said the Government intended to protect resource-owner interests while ensuring the country could attract investment and generate wider economic returns.

He also praised the cooperation between Gulf and Central province landowners, particularly their agreement to an 80–20 benefit-sharing formula. The arrangement, he said, recognised the participation and contributions of the respective groups.

The next phase of engagement will involve Tier 2 consultations covering business grants, infrastructure development and infrastructure tax credit projects. The Prime Minister said business development grants would be considered from the 2027 National Budget.

He stressed that communities in Gulf Province and the Hiri and Motu-Koita areas of Central Province should see improvements in infrastructure, livelihoods and business prospects rather than simply host projects that benefit the national economy.

Mr Marape also highlighted the longstanding links between Gulf and Central province communities, including their traditional trading and cultural relationships. He said Papua LNG could create further opportunities to strengthen those connections.

Thanking the landowners and other stakeholders for their patience, he said the Government's focus extended beyond the immediate construction period to the welfare of future generations.

“This is about the next 20 years, next 30 years for our children. Thank you for investing in your children’s future,” Mr Marape said.