Kumul Petroleum Hopes to Work with Developers of Papua LNG Project
Kumul Petroleum Holdings Ltd (KPHL) hopes to work with the developer of the Papua LNG Project and its partners.
According to Managing director Wapu Sonk, KPHL hoped to work with Total and the Papua LNG joint venture partners to start the front-end engineering design work and begin the liquefied natural gas (LNG) financing and marketing work.
It can be recalled that Petroleum Minister Kerenga Kua has said that an announcement would be made where the Papua LNG Project would be a stand-alone project towards next year’s design phase.
He said that a meeting would be held between the government and the Total senior management this month.
“If the decision is made, it will be positive for PNG because we will begin to see some early work going on,” Kua said.
The country’s national gas and oil company, KPHL is in charge of managing the State’s 16.57 per cent equity in the ExxonMobil operated US$19 billion (K64.91 billion) PNG LNG project. This has allowed the firm to become the third-largest player in the largest single investment made by the country.
Sonk added that even with this pandemic, there had been no material impact on the project and its operations, besides a few delays in various areas.
“PNG LNG project performed very well in terms of LNG production,” he said. “The main challenge has been LNG prices, which has been very low in Q1 to Q2 and in the third and fourth quarter, the prices have improved to approximately US$6.40 to US$7.50/MMbtu (K21.98 to K25.76 million British thermal units) from as low as US$2.40/MMbtu (K8.24/MMbtu) early this year. LNG and oil price has impacted all the joint venture partners and us at Kumul Petroleum as well as with MRDC (Mineral Resources Development Company), no exception. PNG Government also is impacted as a result.
He said, “We hope that the oil and LNG prices will recover and be stabilised given there is now a vaccine for the Covid-19. ExxonMobil maintains the great job in optimising and improving production in a safe and environmentally friendly manner.”
Sonk added that KPHL paid K200 million as dividend due to better cost commodities last year.
“We have been able to continue to train Papua New Guineans at the Kumul Petroleum Academy, deliver cheap and reliable power into Port Moresby through NiuPower, delivered the rural electrification programme mostly in Hela and Southern Highlands connecting Nipa to Tari, Tari to Koroba and Tari to Hides (Juni) and Ialibu to Kagua,” he said.