P’nyang a standalone gas project: Minister
Minister for Petroleum, Kerenga Kua, says the P’nyang gas field will be developed together with Train 3 as an integrated standalone gas project under the terms of a separate gas agreement.
On the other hand, the Papua LNG and PNG LNG projects-type concessions will not be readily available to P’nyang.
Minister Kua made this remark following the passing of the various legislative amendments to give effect to the Gas Agreement for the Papua LNG Project that was signed in April this year.
Minister Kua thanked the Prime Minister for his support with clearing the Papua LNG Project Agreement after a three-month long review process.
Referring to fiscal terms applying under the Papua LNG Project and the PNG LNG Project Gas Agreements, Kua said the three-month review had revealed that the Papua LNG Project had improved a bit from PNG LNG in terms of financial accommodation for State equity back-in plus additional concession agreed as to National Content, pipeline Third Party Access, option for KPHL to own the project pipeline and option for national entities to own LNG tankers.
However, he said the Marape-Steven Government expects the P’nyang Project Agreement to be different and must deliver substantially better fiscal and economic benefits for the country than the Papua Project.
He said while Total SA is new entrant in PNG and the concessions given to Papua Project made sense a bit, the balance of the partners of that project are the same in PNG LNG and in P’nyang who have been benefiting from the very generous concessions offered in the PNG LNG Project.
The Minister said although the State has the option of deferring the P’nyang Gas Project development to when the new and oil and gas legislation and revised fiscal regime is introduced in 2020, there are compelling considerations that merit having the P’nyang Gas Agreement negotiated and signed under the existing the Oil and Gas Act 1998.
These include the need to stagger the construction and development of Papua and P’nyang projects so that the country can enjoy an extended eight-year economic boom as opposed to four years from a single project.
In addition, the State is a participant and wants to benefit from the economic savings brought by the combined engineering, financing and construction of the three trains for Papua and P’nyang.
Minister Kua also announced the NEC decision to appoint the members of the State negotiating team which will be headed by Chief Secretary, and deputised by the Managing Director of Kumul Petroleum.
Other State negotiating team members include the secretaries for the departments of Petroleum, Treasury and Planning; the Governor of the Central Bank; the State Solicitor; and the Managing Director of MRDC.
The SNT will report to the Ministerial Gas Committee made up of the Deputy Prime Minister and ministers for Petroleum, Treasurer, Minister for Planning, and Minister for State Enterprises & Investments. He will chair this Committee.