The Government and the project partners for the US$12 billion (or K36 billion) P'nyang LNG project in Western signed the Fiscal Stability Agreement on March 18, 2024 in Port Moresby. [1]
Prime Minister James Marape was present at the signing at the Government House, Konedobu. He expressed his gratitude and commendation to ExxonMobil, the project partners, co-venturers, along with the Western Provincial Government for their concerted endeavor and cooperation with the National Government which led to the significant progress of the P'nyang LNG Project. [2]
Also present at the signing was the Governor General, Sir Bob Dadae.
Esso PNG P'nyang Limited and Ampolex (Papua New Guinea) Limited (who are both affiliates of ExxonMobil PNG), and Santos and JX Nippon are the project co-venturers.
The signing of the Fiscal Stability Agreement is a milestone step in the advancement of the project, making it potentially the third LNG export project of PNG. The signing follows the execution of the P'nyang LNG Project gas agreement in February 2022.
The Prime Minister said the signing of the Fiscal Stability Agreement is a proof of PNG's dedication to fostering increased economic activities, and to send a positive signal to investors in the extractive sector.
He stated, "You were our anchor managing partner in the PNG LNG Project, entering our country through that project in the early part of this millennium." [1]
"And you fully understand the necessity for our country to benefit more from resource projects, proving yourself as exemplary partners." [1]
Chairperson and Managing Director of ExxonMobil PNG/Esso PNG P'nyang Limited, Tera Shandro said the development of the P'nyang LNG Project would bring significant benefits to all its stakeholders and further enhance Papua New Guinea's position as an LNG-exporting nation.
Additionally, Western Province Governor Taboi Awi Yoto, highlighted the role of ExxonMobil PNG, the Government, and stakeholders, and he emphasised the importance of the province's involvement in the project negotiations.
"This is unprecedented for provincial governments like ours to participate in the negotiation process of such a critical national resource project," the Governor said.
The proposed P'nyang LNG Project is expected to bring LNG by constructing new upstream facilities in Western, connecting it with existing infrastructure. The project is still subject to final investment decisions by the co-venturers.
The development of the P'nyang LNG Project is to begin after the Papua LNG Project, in support of economic development in PNG.
According to the news report of “The National”, the P'nyang LNG Project would be an independent one, with landowner benefits to be provided under a future benefit-sharing agreement to be negotiated by the State in accordance with the Oil and Gas Act. [1]
“The P'yang field is located within Petroleum Retention License 3, which covers 105,000 acres (425 sq km). The field is estimated to have 4.36 trillion cubic feet of gas.”
“Esso PNG P'nyang Limited operates the licence and together with Ampolex (Papua New Guinea) Limited, these ExxonMobil affiliates have a 49% interest. Affiliates of Santos and JX Nippon have a 38.5% interest and 12.5% interest respectively.”
Looking back in September 2023, Shandro was one of the speakers at the Petroleum & Energy Conference, Papua New Guinea. She addressed the roadmap of the country’s bright LNG future.
“Operating in Papua New Guinea is a privilege, and we are guided by our belief that the benefits associated with resource development should be shared by the people of this country.”
“As the single largest business investment in the country, PNG LNG has helped forge a new industry that now directly and indirectly employs thousands of Papua New Guineans. In addition, since first gas in 2014, PNG LNG has delivered over 22-billion-kina to the State and its landowners through various tax and royalty streams.”
“We credit robust collaboration will all levels of government, landowners, landowner companies, local businesses, and peers for the success of PNG LNG and Papua New Guinea’s growing LNG industry. Having a strong National Content program underpinned by workforce development, supplier development and strategic community investment ensures our presence positively impacts Papua New Guineans by equipping them with the skills needed to enhance their lives, as well as their future.”
In conclusion, Shandro said, “When we work together, it is truly awe-inspiring to imagine what the potential collective benefit of LNG developments could be for Papua New Guinea and its people.” [3]
Reference:
[1] (19 March 2024). The National. "State, firm sign K36 billion project". https://www.thenational.com.pg/state-firm-sign-k36-billion-project/
[2] (18 March 2024). PNG Post-Courier Online. "Prime Minister Marape commends Exxon Mobil and partners for advancing P'nyang LNG project".
[3] ExxonMobil PNG (14 Sept. 2023). Facebook. https://www.facebook.com/photo/?fbid=625454603086200&set=a.435347885430207&locale=en_GB
