ENERGY SECTOR CAN GENERATE MASSIVE RETURNS IN REVENUE
by PNG Business News - September 28, 2022
Photo: Hon. Kerenga Kua, Minister for Petroleum & Energy. Credit: Papua New Guinea Energy Summit & Exhibition Twitter Page
The Energy Sector of Papua New Guinea is just awaiting to be tapped into as it has the capacity to generate massive returns in revenue.
Gas projects such as The Papua LNG project and P’nyang Gas project are expected to bring in huge revenue into the country’s economy when they come into operation.
Not only will PNG be generating revenue from these upcoming projects but opportunities such as employment, infrastructure development, skills training, business ventures and small to medium spin off projects will also arise through these gas projects.
Minister for petroleum and Energy, Hon. Kerenga Kua has been at the forefront of boosting these projects into operation as early as possible without letting the construction phase of the projects to be delayed.
In his speech at the 4th PNG Energy Summit, the Minister stated that PNG is now ready to generate revenue from the energy sector.
He further stated that after the completion of the construction phase for the Total Energy Papua LNG Gas Project, which is to begin in 2024, the construction phase for the P’nyang Gas project will be scheduled to commence.
Kua said “Total Energy has already announced its Final Investment Decision (FID) for the Papua LNG Project which shows that the future of Petroleum and Energy resource development is heading in the right direction.”
Minister Kua also stated that PNG’s exports of Liquefied Natural Gas (LNG) will almost double when these two projects start LNG exports.
Minister Kua said, “Due to the ongoing demand of gas increasing in the European and Asian Markets, the two projects are set to generate more revenue into the country’s economy with our exports expected to double from the current 8.5 million tons per annum (MTPA) to 14 to 15 MTPA”.
He further stressed that Papua LNG is to reach its FID in 2023 and the first LNG export is expected around 2027.
“This will be followed by the FID and construction phase of the P’nyang Gas project by 2023” he said.
Developers also will allow a percentage of this gas projects for Domestic Market Obligation (DMO) “This gas will be used within the country mainly for power generation and other purposes such as Industrial use and LPG” said Kua.
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 - 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 - November 28, 2022
Port Moresby Chamber of Commerce and Industry holds 67th Annual General Meeting
The Port Moresby Chamber of Commerce and Industry (POM CCI) held its 67th Annual General Meeting at the Lamana Hotel on the 24th of November 2022 , present to witness the occasion were its members, executives and various stakeholders. The meeting was officially opened by the President and Master of Ceremony Mr. Rio Fiocco who gave his opening remarks and report. He thanked all the POM CCI staff for their hard work this year despite the challenges faced by covid and other changes in the administration. Some of their achievements highlighted included the recruitment of two graduate accountants from the IBS University and the employment of its new membership officer. Mr. Rio Fiocco stated that by 2023 the chamber will be working with Total PNG to pre-qualify its members to be contracted to early works stage of the Papua LNG project . "All members who have issues affecting their business can feel free to come and see us so we can lobby for you through NCD or if it government related we will also lobby for you through the PNG Chamber of Commerce and Industry", said Mr. Rio Fiocco. The treasurer of POM CCI Ms. Akae Beach presented the chambers Financial Report stating that it had made a net surplus of k114,020 which is a 12% net profit margin despite not recouping most of its membership fees. "The Port Moresby Chamber of Commerce and Industry Inc is in good financial position and our net asset stand at K1.49m compared with K1.38m last year , a healthy increase of 8 %. Whilst conditions remain challenging , I am confident that the chamber will continue to be in overall surplus in 2022 as we continue maintaining our current strategy ( with an increase focus on both the Corporate and SME sectors) whilst continuous improvement in our financial systems, increase online and physical marketing efforts and increase member initiatives" stated Ms. Akea Beach. Ms. Akae Beach concluded that she will be leaving the chamber by the end of the year but will still support the chamber within her own capacity.
PNG Business News - November 27, 2022
PM Marape, Ministers and star international business speakers headline PNG Mining & Petroleum Conference in Sydney
Prime Minister Marape headlines a star line-up of speakers at the 16th PNG Mining and Petroleum Conference, in Sydney in December, to promote international investment in PNG. Already over 1000 attendees are registered to attend, as the Conference features a dynamic and engaging program centered around Prime Minister Marape’s announcement of 4 new mega projects and the expected re-opening of Porgera gold mine. Prime Minister Marape will be providing the keynote opening address on Day 1. He will be joined by Australian International Development Minister Pat Conroy. Senior executives of the major international investors in PNG, including Newcrest CEO Sandeep Biswas, Harmony Gold CFO Ms Boipelo Lekubo, TotalEnergies Senior Vice President Mr Julien Pouget, Santos President Upstream Mr Brett Darlie and ExxonMobil PNG Managing Director Mr Peter Larden will be providing a global outlook for their companies’ operations around the world, how they have adapted to emerging trends and how their PNG investments fit into their global portfolios. A highlight will be CEO of Fortescue Future Industries Dr Mark Hutchinson’s presentation of Fortescue’s vision for how green hydrogen can be a gamechanger for the world and PNG’s envisaged role supplying hydrogen to the world. Day 1 concludes with a session featuring former Australian Foreign Affairs Minister, the respected Julie Bishop, presenting her view as to why Australia needs to invest more in PNG, and PNG’s Trade and International Investment Minister Richard Maru outlining the PNG government’s vision for investment and development in non-mining sectors. Each session on Day 1 will feature panels moderated by well-known Australian media personality Ms Ticky Fullerton. Day 2 of the Conference features policy statements by Mining Minister Ano Pala and Petroleum and Energy Minister Kerenga Kua, presentations by Kumul Petroleum and MRDC, project updates on all of PNG’s existing mining and energy projects, and the presentations of the next wave of resource and energy projects – Papua LNG Project, Pnyang LNG Project, Pasca Gas Project and Wafi Gold-Copper Project. Day 3 of the Conference features a unique 3 stream format focused on varied themes including Exploration growth, Climate Change & Energy, Improving Ease of Business, Infrastructure, and Business Success stories. Day 3’s program features a significant list of speakers including heads of government regulatory agencies, CEOs of various PNG and international businesses, and includes international institutions such as the IFC. The Conference concludes with a session that focuses on PNG success stories where resource revenues have been invested for future benefit, and a presentation on the importance of the PNG Sovereign Wealth Fund. “It’s an engaging and dynamic Conference program with a high-profile cast of speakers. I am very grateful for the support that the Prime Minister has provided to the Conference, and the unprecedented participation of Government Ministers and heads of departments and agencies as speakers. Industry and the PNG Government are presenting a united front in promoting PNG as an international investment destination at the Conference. We are pleased that we can work with the Government in this regard. The Prime Minister will be in a unique position in our history by speaking about the advancement of 4 major projects, and the potential doubling of PNG’s GDP in the near future, which can usher in significant economic benefits for our people.” Said Mr Anthony Smaré, President of the Chamber of Mines & Petroleum. “We are also very fortunate that so many high-profile leaders from some of the world’s largest companies have taken time out to come and speak at the Conference to outline why they believe PNG is an important place to invest in. Australian Minister Pat Conroy’s speech will give us an indication of Australia’s view of PNG’s importance. I am personally looking forward to the afternoon session on Day 1 when Julie Bishop will present her view as to why Australia needs to invest more in PNG, and Minister Richard Maru will challenge international companies and countries to invest more into the PNG Government’s investment priority areas such as infrastructure and agriculture.” “Over 1000 people are now registered to attend the Conference, but there is still some seats left, so I encourage business people not already registered, to quickly secure their seats at www.pngconference.com over the next few days. The Conference is unique because you can meet everyone who has a role in PNG’s resources and energy sector - Government policy makers and regulators, the business movers and shakers, landowners, financiers, investors, suppliers and contractors from all over the world – all in one place over three days from 5 to 7 December 2022 at the Sydney Hilton Hotel.”
PNG Business News - November 27, 2022
PM Marape supports development of oil palm industry on a massive scale in PNG
Photo: PM Marape and Governor Bird in discussions with representatives of Pacific Elite Palm Oil Group in Singapore on Monday (November 21, 2022). Prime Minister Hon. James Marape has given his support to development of the oil palm industry in Papua New Guinea on a massive scale. PM Marape gave his support after he and East Sepik Governor, Hon. Allan Bird, met with representatives of Pacific Elite Palm Oil Group in Singapore on Monday (November 21, 2022). The company currently runs an oil palm project in East Sepik, which it wants to emulate in all provinces, saying that it will be an economic gamechanger for the whole country. The company aims to create the largest agriculture-based wealth in the South Pacific, as well as generate electricity for PNG, using oil palm. Governor Bird told PM Marape that if a long-term oil palm development plan was drawn up, with the aim of economic independence for PNG, one million hectares of oil palm grown all over PNG would bring in an extra K100 billion for the country. “We can double our GDP just from palm oil,” he said. “If we go into downstream processing, this K100 billion could double, so that we could be earning K200 billion on top of our current GDP. “The other flow-on to the economy is power production that fits into the grid, carbon credits, increased cattle production, as well as jobs. “Palm oil is amazing because you can do so much with it, including green energy, which can be generated from the waste of palm oil. “If we have 33 operations throughout PNG, similar to what we are doing in East Sepik, 100,000 jobs would be created “This is brilliant.” Governor Bird told PM Marape that oil palm, when made into biofuel, would save the country millions of kina. “If we produce enough palm oil, we don’t need to go out and buy fuel, as we can produce our own,” he said. “It can also bring inflation down as we are no longer importing inflation. “I’m excited because it provides us an escape plan from all these things that are affecting us.” PM Marape welcomed the proposal by Pacific Elite Palm Oil Group and the ideas of Governor Bird, who has helped to grown the vanilla and cocoa industries in East Sepik, and PNG. “As regards expanding nationwide, I invite you to come to Port Moresby, and I will run the investment figures past the super funds and Kumul Consolidated Holdings,” he told the company’s spokesperson Alexander Tho. “A family of investors can easily mobilise the money required for the project. “I also want you to have a stake in the business, and run it, as we cannot do it on our own, in like what Barrick is doing at Porgera Mine.”