Dirio Project Supplies Power

By: PNG Business News November 23, 2020

Dirio Gas & Power project, the newest private power plant in Central province, was recently launched, providing the City of Port Moresby its much-needed electricity.

The power plant generates 45 megawatts (MW) of power supplied to the city’s power grid at a rate of 37 toea per kilowatt, distributed by PNG Power Ltd as per the Power Purchase Agreement (PPA) between the two companies.

Hela Governor Philip Undialu hopes that with this new milestone, the developers of the PNG LNG project can now have great confidence in the resource landowners in establishing other major business projects in the near future.

“We have 20 years of a power supply contract with PNG Power and almost 25 years of gas supply from ExxonMobil PNG, so your investment is not wasted,” he said. “Welcome you all to the class of the corporate world, we are no longer the bystanders, rent collectors and royalty collectors.”

He also expressed his gratitude to the agencies and people involved, especially for the National Government for this project.

For his part, Mineral Resources Development Company (MRDC) managing director and chief executive officer Augustine Mano said that for the first time, this project signalled the entry into power generation business by a nationally-owned company.

“It is a historic moment for landowners and a momentous occasion for the country,” Mano said. “Dirio is owned by PNG LNG project landowners in Hela, Southern Highlands, Gulf, Western and Central. Their provincial governments are also partners in this project. I’m very proud of their decision to undertake this venture. The petroleum and energy sector in our country has huge potential in the upstream through to downstream value chain. For a long time, business along this value chain has been dominated by foreigners. That has to change, and that change begins now.

“Dirio Power is a game-changer,” he said. “The MRDC group and its trustee subsidiaries have the capacity to undertake this business. “We have secured financing and retained the best expert advice to ensure this power project succeeds.”

Meanwhile, PNG Power Ltd has been urged to come out with solutions so that residents and business owners should pay less for electricity. According to Prime Minister James Marape, this launch, together with the other power players in the region, should contribute a lot to the power and therefore, can reduce the cost of sale of electricity energy to PNG Power.

“I want all our manufacturing plants in Port Moresby to have excess to cheap power,” said James Marape. “PNG Power you now have first opportunity with half the cost of power being passed to you, I want this to be passed on to customers and customers to enjoy cheap power in Port Moresby.”

The Dirio project proposed to provide Port Moresby with 45 MW of power using natural gas bought from the PNG LNG Project. The plant will function three 15 MW Titan Solar turbines, coming up with the total energy capacity of 45 MW.

In September 2019, the landowner company signed the PPA with PNG Power, agreeing to provide electricity at a cost lesser than other third-party suppliers. Dirio supplies cheaper power, making electricity more affordable tor residents.

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