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PPL Inks K71 Million Power Deal
by PNG Business News - July 21, 2021
Photo Credit: Papua New Guinea Today
For the expansion of the Tari to Hides high voltage transmission line, PNG Power Limited has inked a K71 million deal with Chinese Tibean Electrical Company.
The 132 kV transmission line will be extended from Mt Hagen to Tari and from Tari to Hides, according to PPL acting chief executive officer Obed Batia.
He claimed that this will boost consumers while also providing power to the country's remote villages.
The government allowed the Tari to Hides link to be included in the scope of Phase 2 of the National Power Grid Development Project, according to State Enterprise Minister William Duma.
PPL will build this critical transmission line and substations, according to Tibean Electrical Group Limited.
“The scope of the extension includes 40km of a three-phased single circuit 132kV transmission line of 6.6 per 132kV step up sub-station at the Hides plant and 132kV extension bars and laundry gantry at Tari sub-station.”
He said that the project's scope and cost include land access, tower base payments, and compensation for upgrades, totalling K71 million including contingencies.
“The Tari to Hides link is critical to enable dispatch of the proposed Hela Power gas-fired plant into the grid and reliably distributed to customers optimising the use of the upgraded transmission infrastructure and making the project economically viable in the medium term.
TBEA will subsequently construct the critical missing link transmission infrastructure between Tari and Hides following the signing, according to Duma.
According to Prime Minister James Marape, this is a government-funded initiative to build a supernational grid system that will extend from the Highlands to the Mamose, as part of a national goal to ensure that 70% of homes have access to dependable and cheaper electricity by 2030.
Kamus, Maxine. Post-Courier (16 July 2021). “PPL Signs K71 Million Tari-Hides Power Deal”.
PNG Business News - March 11, 2021
Puma Energy Concerned About Shortage of Forex
Puma Energy PNG Ltd is concerned about a shortage of foreign currency (forex) to import crude oil in a timely manner, according to country manager and director Hulala Tokome. The business paid for its crude supplies when forex was available on the market, he said. Tokome added that the availability of forex had influenced the crude oil purchase schedule, also commenting on oil prices, citing Platts as a source. According to Tokome, oil prices for February have been steadily rising. Platts is a source of benchmark price assessments in the physical energy markets and a provider of energy and metal knowledge. “Hence, we will have an increase in prices for March as the Independent Consumer and Competition Commission (ICCC) pricing structure is based on Mean of Platts (MOP) Singapore prices for the prior month,” Tokome said. “There is a one month lag on pricing effect. “All eyes will be on the Opec (Organisation of petroleum exporting countries) meeting. Their decision to increase crude oil production or not will determine which direction prices will go. There is strong market optimism around global demand returning on the back of vaccine rollouts.” Many countries have begun to announce plans to phase out lockdowns, he said, and the warmer weather could help support demand. “With this, prices should continue to trend upwards,” Tokome said. Brent rates are currently at US$64/bbl (K220.95/barrel of oil), according to Tokome.
PNG Business News - April 29, 2021
Parliament Passes Energy Bill
The National Energy Authority Bill, 2020 was passed by the National Parliament with an overwhelming majority of 73 to 0. The National Energy Authority Bill was created to control renewable and non-renewable energy production, storage, delivery, and retailing. The Act will also cover the following functions: Governing the oil market by overseeing the implementation and implementation of rules, legislation, and policies. Levies, fines, tariffs, and other charges are received and collected. Responsibilities for energy research and development in order to put energy policy and legislation into practice The aim of the Act Administer the National Electrification System is to approve the corporate policies of subsidiary corporations and affiliates Administrate the National Electrification Trust Funds The Bill for an Act to Reform the Electricity Industry Act 2020 was also passed. The National Energy Authority 2020 and the Electricity Industry Act Amendment Bill 2020, according to Minister for Energy and Rural Infrastructure Saki Soloma, are the culmination of the work undertaken so far in restructuring the energy market. He said that the passed Act of Parliament would create energy and electricity industry legislation for the energy sector in general. According to him, the National Energy Authority Bill 2020 establishes a robust and equitable legislative framework, with fines imposed on those that violate the Act and regulations. He went on to say that the Electricity Industry Act (Amendment Bill) contained consequential changes to the Electricity Industry Act, allowing the National Energy Authority Act, which was passed by Parliament, to go into effect right away. The National Energy Authority Bill 2020 is based on the same model used for the establishment of stationary authorities such as the National Fisheries Authority, National Information and Communication Technology Authority, and others, according to the explanatory notice. It specifies that the National Energy Authority is a policy and regulatory agency, not a commercial institution, as stated in the Act. PNG Power Limited will no longer be an economic or technological authority and the NEA will conduct the licensing and technical functions that were formerly handled by PNG Power Limited.
PNG Business News - May 04, 2021
Australia Supports Electrification for PNG
The Australian government has decided to contribute $US90 million (K315 million) to the Marape government's top-priority Edevu Transmission and Electrification program. The Edevu hydropower plant, which is based in Sogeri, is part of the Papua New Guinea Electrification Partnership, which seeks to reach 70 per cent electrification across the country by 2030 with the support of Australia, the United States, New Zealand, and Japan. Treasurer Ian Ling-Stuckey praised the announcement, calling it a major step forward for the Marape government's electrification efforts. “With only 13 per cent of the nation connected to power, this is a very important and ambitious project,” he said. “We know that the original announcement was made at the APEC meeting. This was a good announcement. But it is one thing to make big announcements and cut ribbons. “Support from our international friends and allies is critical, and I am grateful that Australia, through the Australian Infrastructure Financing Facility for the Pacific, is coming to the party.” Ling-Stuckey stated that the discovery would be on favourable terms, with a $US18 million grant portion (K65 million). The money will be on-loaned to PNG Power Ltd, pending NEC clearance. The Edevu project would have the required infrastructure to link modern hydropower generation to the Port Moresby Grid, allowing diesel generation to be replaced at a lower cost and with less environmental impact. It will also allow for the upgrade of substations to improve grid stability. PPL will now be able to purchase and mount smart meters in consumer premises as part of the funding. Taxes, duties, levies, and fees on supplies, utilities, and facilities available for the project would be exempted as part of the Marape government's contribution.
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.