Kua Provides Updates on Oil & Gas Projects
Petroleum Minister Kerengua Kua said that there will be an announcement next month if the Papua LNG will be a stand-alone project towards the design phase next year.
He added that the Total senior management and the delegation of the government will be meeting on Thursday, December 10.
“If the decision is made, it will be positive for PNG because we will begin to see some early work going on,” Kua said. “There will be cash flow for the country and it could have an impact on the gross domestic product for us. It’s a positive thing to look forward to so we will wait for the decision on Dec 10 or 11. We will make the announcement on whether we will delink Papua and P’nyang and make them separate stand-alone projects.”
Kua noted that this was the status of P’nyang and that there was still time to negotiate.
“The fact that we delink the two projects, it will not disadvantage P’nyang because whether you link it or delink it, the construction phase of P’nyang is still four to five years away down the track,” he said. “We have all the lead time here to negotiate a good contract, no need to rush because we don’t need a gas agreement for P’nyang for another four to five years yet. The construction for Papua has to start and complete before P’nyang connects so we still have a lot of time.”
Kua said the dialogue with Exxon showed opportunities for negotiations and that there could be good deals. “There is still some promise there so we will continue to work on that,” he said.
Kua said that Pasca was the only small project with less volume of oil and gas. He said that the construction is estimated to cost around K6.9 billion (US$2 billion) on a scale of PNG LNG which is K65bil (US$19bil) and Papua LNG which is K34.5bil (US$10bil).
“In PNG US$2bil (K6.9bil) is a lot of money and negotiation is at a very advanced stage,” he said. “We will announce a gas agreement as soon as we can. Our concentration on the negotiations has been compromised by the disturbance of politics but we are monitoring it.”
Kua said that investors are not leaving, adding that the state has wanted to reform legislation.