PM, Kua: Additional Gains Put In Gas Deal
The government has given oil and gas giant, Total SA, the green light to proceed with the implementation of the Papua LNG Project.
At a conference in Port Moresby yesterday, Prime Minister James Marape and Petroleum Minister Kerenga Kua claimed their re-negotiations resulted in “additional gains” for PNG.
They announced the five issues they successfully negotiated with the developer, including:
On national content “Total is ready to progress immediately in preparing a detailed national content plan with the Department of Petroleum and Energy, as requested by the Minister for Petroleum.
We are convinced that the development of this National Content Plan will provide many positive opportunities for the State and the people of PNG. Be assured that Total is fully committed to the effective implementation of such National Content Plan”.
On petroleum pipeline third party access, Total will build third party access points and “if requested by a third party, the participants have agreed to engage in negotiations to enable access by such third party to the pipelines on mutually acceptable terms”.
On petroleum pipeline ownership, Total has agreed that “after all loans to the Papua LNG Project and Kumul carry and past costs have been reimbursed, if the State wishes at that time to acquire a participating interest in the pipelines, the participants will engage to negotiate in good faith such an acquisition by the State and the conditions under which it could be envisaged.”
In particular, the State shall recognise the “fair ‘value’ of the investment in considering such an acquisition including a fair tariff imposition for usage of the pipeline.
On LNG tankers, “Total and Kumul have formed a commercial joint venture for the purpose of marketing their shares together.
Total agrees to evaluate together with Kumul the option of using LNG carriers in which a participating interest is owned by the State for transportation of Kumul’s share of such jointly marketed cargoes through negotiated arm’s length contracts”.
Mr said the Cabinet-sanctioned review was now completed and as was typical of any such process, there was an initial impasse, but it did not escalate into a “Mexican standoff”.
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