Kumul Shipping Setup, Key To Local Content
The set up of new state business venture targeting the oil and gas sector will be used as a vehicle to drive local content participation in the vital energy industry.
Kumul Shipping Corporation will be the state’s 10th business entity and will encompass shareholding not only by the State but also open to shareholding of impacted provincial governments within resources areas.
Minister for Public Enterprise and State Investments, Sasindran Muthuvel, said the setup of Kumul Shipping Corporation presents, not just a business opportunity for the State, but also that of provincial governments.
He said this while witnessing the signing of an MoU with Kumul Consolidated Holdings for the Gulf provincial government to also take up an interest in the new business venture targeting shipping transportation of hydrocarbons domestically and overseas.
“Partnership with various provincial governments and LLGs and interested groups will increase the national content.
“To have that share in terms of these LNG businesses, we are also striking an understanding with the gulf provincial government.”
Mr Muthuvel indicated to opportunities are there within the Papua LNG, and the current Pasca A project currently being negotiated.
Minister for Petroleum Kerenga Kua explained the application of the shipping service may take place in current and future gas agreements citing agreements such as the Papua LNG may accommodate the State’s intention following the project’s review undertaken by the Marape government.
“When the Marape government came into office, they called for a review of the Papua gas agreement to include a number of additional opportunities for the country,” he said.
“One of the requests by the government to Total (Papua LNG operator) was that the government and the provincial government should be allowed to be able to participate in the shipping of the LNG cargo to Papua New Guinea and to the overseas markets as an additional benefit to this country.
“Total in their generosity, because the agreement has already been signed and closed, in a subsequent letter, in a nonbinding statement they said yes they are happy to look at in the future the potential to help and state and the provincial governments to create a shipping vehicle through which our country can participate in the shipment of cargo to overseas markets.”
He reiterated the commitment as one in principle and non-binding.
“It is a gentlemen’s understanding."
On the back of that and the government set about asking KCH and everyone else provincial governments to organise themselves,” Mr Kua said.
Mr Kua could not, however, confirm if this arrangement is also set to be tied into current negotiations with Twinza for Pasca A, adding current negotiations were still ongoing.
Mr Muthuvel added the establishment of Kumul Shipping will take 6 months to 1 year to set up to ensure structures are done in a way that it is mutually beneficial to all involved.