Economist says PNG has Proven its Capability and Accessibility Through Projects
With the PNG LNG project, the country has proven its accessibility to the East and South East Asian markets and capacity to supply competitively said institute of National Affairs director Paul Barker.
Barker, an economist, said that the P’nyang and Papua LNG projects could meet the LNG demand window in 2027.
“PNG has greater geopolitical stability than prevalent in much of the Middle-East, with the high cost incurred and significant lead in time, both to establish the extraction and processing capacity in PNG, but also the necessary depot and degasifying facilities to handle LNG in the recipient countries,” he said.
He added that a higher commitment for the market was needed, say for oil production “so the issue of the market slot remains important, even though the market is growing and new outlets materialising, as in India and Myanmar”. In addition, he said that PNG gas fields could meet the market demand for 2027, but only if agreements and financing were to progress immediately.
“In the case of Papua LNG, the agreement is already in place, albeit that the developers are reluctant to proceed without the associated P’nyang project also gaining the go-ahead,” he said.
“The companies are applying leverage on the Government, while Western province sees the P’nyang project as a vehicle to provide leverage to embrace the various stranded Western province fields. The early development of these fields would certainly provide a useful economic, employment even temporary fiscal kick-start for a rather moribund PNG economy.”
Various players must reach certain compromises, he said, “albeit that the government and companies each have some negotiating leverage, such as with other potential project opportunities that the major firms have elsewhere”, adding that all parties which included landowners must not overlook critical preparatory processes.