Marape Provides an Update on the Papua LNG project
by PNG Business News - July 15, 2021
Photo Credit: Total
Prime Minister James Marape said that the Papua LNG project in the Gulf will enter pre-Feed (front end engineering and design) in September.
“Papua LNG will move into pre-Feed in September after the financial stability agreement was signed in February,” he said.
“It is my expectation that as the country celebrates its 46th Independence anniversary on Sept 16, we will observe much progress in the Porgera mine, Papua LNG and Pasca A P’nyang and Wafi-Golpu projects.”
The administration, according to Marape, is focused on improving the country's position in the P'nyang and Wafi-Golpu projects.
“My Government has established the SNT (State negotiating team) for P’nyang and will be commencing talks with ExxonMobil and its partners later this month both here and in Houston (Texas) to progress this project,” he said.
“For Wafi-Golpu, the Government has cleared the term sheets, and it is expected that parties will convene this month to establish negotiation pathways for formal negotiations with all stakeholders.
“Without changing the laws or using proposed new laws we are getting far superior deals based on government policy-based negotiations with our investors.
“For Porgera, we are getting 65 and to 35 per cent in favour of the State in the first five years, we are getting an average 55 per cent to 45 per cent in favour of the State upfront. The last agreement any government has secured stopped at 51 per cent project economic, gains to PNG for the Papua LNG project by the O’Neill government.”
Marape said that the new government had gotten a better bargain for the Pasca A project in Twinza.
“The production levy was negotiated up to a new level at five per cent for the petroleum sector, royalty and development levy calculations have now shifted positively for PNG to two per cent straight on the gross revenue with no deductions, five per cent of liquid petroleum gas (LPG) is secured – which is sufficient to replace the current volume of LPG imported for the domestic market – and the project’s National Content Plan will be tied into the Pasca A project gas agreement.”
The National (14 July 2021). “Marape gives update on progress of Papua LNG project”.
PNG Business News - July 08, 2021
PNG LNG Records Record Production and Best Safety Performance
Photo Credit: Oil Search Limited Despite obstacles posed by the Covid-19 epidemic, the Papua New Guinea Liquefied Natural Gas (PNG LNG) project had its greatest production and best safety performance since its inception, according to departing ExxonMobil PNG managing director Andrew Barry. Barry said that the team achieved record LNG production levels, delivering the company’s best safety performance since production commenced while continuing to meet environmental and social commitments. “EMPNG has completed over 70 million hours of work since production began and had no lost time incidents for more than three years, with no significant process safety events for almost seven years,” he said. “A significant milestone was achieved on Sept 1 with EMPNG’s first shift fully managed and operated by qualified Papua New Guineans workers. “This included the Hides Gas Conditioning Plant and Pipeline operations supervisors, and control room, field and pipeline technicians.” By the end of 2020, the PNG LNG workforce would have grown to 2,784 workers and contractors, according to the annual PNG LNG environmental and social report issued last month. Due to the suspension of several upstream region projects as a consequence of travel and limitations caused by the pandemic, this number was decreased from 3,964 employees at the end of 2019. The overall workforce of the PNG LNG project is made up of 91% Papua New Guineans. In 2020, EMPNG contributed K8.4 million to local communities in the form of contributions, sponsorships, in-kind assistance, and community-based initiatives. The PNG LNG project's contract with ANU Enterprise Proprietary Ltd was renewed, allowing the community lifestyle improvement project (Clip), which began in 2015, to continue. Clip is assisting communities in Hides, Juni, Nogoli, Angore, and Komo in gaining financial independence and improving their living conditions by providing training and assistance in areas such as nutrition, financial literacy, and agricultural practices. The five-year head starts conservation initiative, financed by EMPNG and administered by the Port Moresby Nature Park, was also completed last year. Last year, 36,650 stakeholders participated in over 5,400 community interactions, including over 2,000 official and roughly 3,400 informal encounters. Community interactions were conducted in line with Covid-19 safe practices, with the majority of the engagements focusing on boosting Covid-19 awareness. Through the infrastructure tax credit projects, an additional K57.4 million was spent on local infrastructure. Since construction began, more than K10 billion has been invested in community projects and local infrastructure. Peter Larden, EMPNG's new managing director, congratulated Barry for his six years of leadership, which had left a legacy. “I look forward to building upon the standards he and EMPNG have set to further cement PNG’s reputation as a world class LNG producer and to be able to contribute in a sustainable and meaningful way to enhancing the communities in which we operate and the nation of PNG,” he said. Reference: The National (6 July 2021). “Project records highest output”.
PNG Business News - November 08, 2021
PNG LNG Earnings to Reach K15 Billion in 2021
According to a projection, total earnings from the PNG LNG project would reach US$4.5 billion (K15.4 billion) in the fiscal year 2021. According to estimates recently released by JMP Securities, PNG-based equity and fixed interest markets broker/dealer, Kumul Petroleum Holdings Ltd (KPHL) will earn between US$750 million and US$775 million (roughly K2.5 billion and K2.6 billion) from the project this year, based on current high prices. It also estimates that total earnings from the PNG LNG Project to KPHL have been to the tune of US$5.1 billion (about K17.5 billion) since the project began operations in 2014. “This is an estimate of revenue only,” said JMP Securities. “We are not in a position to comment on the overall costs of operations associated with the project or the wider operations of KPHL,” “Given the current high international crude oil prices and the time lag between movements in oil prices and the pricing of LNG under long-term contracts, we expect continued benign trading conditions for PNG LNG in the coming months. “This will result in a strong performance for the 2021 financial year as a whole. “We estimate that the PNG LNG Project has sold LNG, condensates, domestic gas and naphta valued at US$30.27 billion between April 2014 and September 2021. “More than 80 per cent of revenues come from the sale of liquefied natural gas (LNG). “We estimate that the PNG LNG has sold the equivalent of close to 600 million barrels of oil since 2014. “Around 100 million boe (barrels) have been sold by KPHL. KPHL sells around 35,000 to 40,000 boe per day. “We estimate that the highest average quarterly gas export prices achieved by PNG LNG are US$14.41 (about K49.4) per mmbtu (metric million British thermal units). This was achieved in the June quarter of 2014 on modest volumes.” In the September 2021 quarter, PNG LNG achieved around US$10 (about K34.3) in average gas sales prices. “The lowest gas prices were achieved in the September quarter of 2020 – around US$4.2 (about K14.4) per mmbtu.” Reference: Pacific Mining Watch (2 November 2021). “Papua New Guinea expects K15 billion from PNG LNG in 2021”.
PNG Business News - December 08, 2021
PNG LNG Project Earns K11B
Photo credit: Oil Search According to ExxonMobil PNG Ltd, the PNG LNG project has earned K11 billion in revenue for the government thus far. This was announced by managing director Peter Larden at the recent PNG Mining and Petroleum conference. “Up to October this year, PNG LNG has generated K11 billion in revenue to the State and landowners, which obviously supports investments and services and infrastructure across the country,” Larden said. “In addition, K15 billion in business opportunities (were) generated across the country from the project.” Papua New Guineans made up more than 91 per cent of the company's workers, according to Larden. He also revealed some of the firm's plans. “In July this year, I announced the restart of Angore project which was suspended in 2020 because of the pandemic,” he said. “Angore was part of the original project development plan. “This year, we engaged with the Government and the State Negotiating Team on the P’nyang LNG project. In September, we entered into an important head of agreement in Houston, Texas. “Since that time, we have been in active discussions on the gas agreement and we remain committed to progressing those to a conclusion. “P’nyang will construct new upstream facilities in Western and link them with existing pipeline infrastructure and the LNG plant in Caution Bay. “It will be an in an independent project, covered under a future benefit-sharing agreement. “Gas from P’nyang will support domestic power supply, improving access to electricity power to Western and surrounds. “We are also proud to be part of the Papua LNG project. Momentum is building with studies underway with front-end engineering set to begin next year. “The two projects could last up to a decade of continuous construction activities. “This would be significant to the country with potentially more than K65 billion.” Reference: Pacific Ming Watch (6 December 2021). “PNG LNG generated K11billion revenue”.
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PNG Business News - August 12, 2022
Going Green: FAO-led EU-STREIT PNG Programme provides green-powered facility to local agricultural authorities to effectively service rural farmers
EU Funded UN Joint STREIT Programme in Papua New Guinea establishes a renewable energy-powered facility to support local government authorities in East Sepik Province, in delivering effective services to rural farmers and entrepreneurs. With generous support of the European Union, the FAO-led EU STREIT Programme officially opened a new 3 cluster office building on 10 August 2022, to host the Programme along with the East Sepik provincial divisions of Agriculture and Livestock, Cocoa Board and the National Agriculture Quarantine & Inspection Authority. The new-look office building is powered by 189 solar panels, which significantly reduce greenhouse gas emissions and reduces the collective dependence on fossil fuel. The solar panels supply the building with 90 KW of energy, relieving the resident agencies and authorities from relying on fossil-generated electricity for their needs, including lighting, ICT, water pumping, and temperature control. This zero-carbon-emission facility has the capacity to accommodate around 90 experts, technicians and extension service officers. Equipped with 120 batteries, the building can support staff’s operation for 36 hours in case of experiencing high cloud cover. The building, currently co-resided by the Programme and provincial agricultural bodies, will be transferred over to the East Sepik Provincial Administration at the end of the Programme and will continue to provide a sustainable base for sustainable support to agriculture-related services in the Province. Officiating the opening ceremony, His Excellency Ambassador Jernej Videtič, Head of the European Union Delegation to PNG, in his address, said: “I am happy to be here and to see that things are moving in the right direction to bring sustainable benefits to the people of East Sepik” Ambassador Videtič further highlighted that “with resources from the citizens of Europe to fund the EU-STREIT Programme in providing training, tools and support, the quantity and quality of cocoa, vanilla and fisheries products will increase. The objective is also to protect these quality products in international markets under the EU-STREIT introduced initiative of Geographical Indication.” The East Sepik Acting Deputy Provincial Administrator, Mr James Baloiloi, in his speech expressed his appreciation to the EU for funding the EU-STREIT Programme and the interventions that the Programme is doing in East Sepik and Sandaun provinces. “The STREIT Programme has gone ahead to introduce a culture of agribusiness that now enables the people of this Province and the people of Sandaun Province to have cash income that can sustain their livelihoods.” Mr Baloiloi added, “this infrastructure and building supports us and facilitates the service delivery to our people in this Province as well as Sandaun Province.” Thanking the EU for its generous funding support, Dr Xuebing Sun, the EU-STREIT Programme Coordinator, said: “the Programme has generated substantial impacts at beneficiary, local institutions and enabling business environment levels. This would not be possible with good partnership, increased ownerships and leaderships of the governments and implementing partners.” “This co-residing and close co-operation among UN agencies and their national partners in this integrated space reflect the partnership approach taken by the Programme to sustainably develop agri-enterprise activities in the region,” added Dr Xuebing Sun, adding “the new climate-friendly facility, which is fully powered by solar energy, also provides a space to welcome, advise and serve the farmers, including interested women and youth, who play very important roles along agri-food value chains”. “This kind of ‘green investment’ enables a shift to a more green economy for local institutions and infrastructure to meet cocoa, vanilla and fishery value chains stakeholders” advised Anthony Bennett, the FAO Lead Technical Officer of the EU-STREIT PNG Programme. United Nations’ implementing partners supporting the FAO-led EU-STREIT PNG present in the office include the International Labour Organization (ILO), International Telecommunication Union (ITU), United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP). The EU-STREIT PNG is being implemented as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as implementing partners), is the largest grant-funded Programme of the European Union in the Country and the Pacific region. It focuses on increasing sustainable and inclusive economic development of rural areas through increasing the economic returns and opportunities from cocoa, vanilla and fishery value chains and strengthening and improving the efficiency of value chain enablers, including the business environment and supporting sustainable, climate-proof transport and energy infrastructure development.
Paul Oeka - August 12, 2022
CPAPNG annual meet to discuss global changes
Certified Practicing Accountants of Papua New Guinea will be hosting their 23rd annual conference with about 400 participants nationwide expected to attend the two day conference organized by CPA PNG in Lae Morobe Province from August 18 to19, 2022 CPAPNG was established in 1974 and has come a long way with a lot of achievements along the way. Over the years its membership grew from mere numbers to just below 2000 which includes 40% locals and 60% non-citizens. . The CPA PNG conference is one of CPAs three significant annual events on their calendar with this year's conference theme; Is PNG prepared for the recession?" The conference will see certain key leaders in executive management roles from both the public and private sector delivering presentations in line with the conference theme. CPA PNG's Executive Director Mr. Yuwak Tau said the theme of the conference was selected because there was a decline in the global economy and the general so when that eventuates small economies tend to be affected. He added that they have basically selected the theme that was current and appropriate so that members would find relevance during the course of the conference. “The meeting is to create intellectual and interactive discussions with seasoned business leaders to present and share their ideas and experiences to find probable outcomes within their business environment and industries in times of economic uncertainty”. Some of the topics to be presented by consultants are current significant issues such as crypto currency, transport pricing, bit coin block chain technology and stress management. This were some topics that people have heard about but have not really ventured into. Mr. Tau added that it would be quite hard to measure the benefits immediately but the participants will be able to look at insights shared during the conference that would be appropriate in the areas of employment, accounting, finance, auditing and others. The conference will create an environment where participants can also share information so That they can take points to apply in their work place and industries. In relation the Kumul petroleum Holdings had also presented a cheque of K50, 000 to support the coming event at their head office. The cheque was presented by KPHL's executive General Manager Corporate Affairs, Luke Liria and was received by CPA PNG Chairman Richard Kuna. Mr. Liria said KPHL has appreciated the effort put in by CPA PNG to ensure that its members in State owned enterprises and the private sector were given appropriate level of training and as part of KPHL's corporate social responsibility and commitment they hope that their support will continue to help the organization facilitate and make sure the accounting practices is of international standards. CPA PNG's Chairman, Richard Kuna acknowledged KPHL for their support and stated that he was looking forward to seeing KPHL being a big part of the upcoming conference.
Paul Oeka - August 12, 2022
BSP: Small to Medium Enterprises Loans reaches 60% rate.
Bank South Pacific's Financial Group Ltd Chief executive officer Mr. Robin Fleming has recently announced that the bank has granted more than K200 million as loans to small to medium enterprises under its credit scheme facility that the then Marape government had released to the bank to support Small to Medium Enterprise (SME) and local businesses during the peak of the COVID-19 pandemic. Mr. Fleming said about 1523 customer loans have been approved, that is about 60% of loan approval rates since 2019. Prior to this announcement BSP and the Department of Commerce and Industry (DCI) had agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million. The previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year. Fleming stated that even though they have exhausted and rolled out the bulk of the governments relief funds for SME's they will still be running the SME loan program under its credit facility scheme “At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility”. “There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility”. “The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to”. As part of the government SME relief funding, Commercial Banks were allocated K200 million with BSP Financial Group receiving K100 million, NDB K80 million and another K20 million was allocated to the department of Commerce and Industry BSP could not comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, the bank has also made it a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.