PNG White Paper LNG

LNG to drive electrification of electrification of PNG

PNG Industry News | 26 March 2018
PAPUA New Guinea is often described as a country flowing with milk and honey, floating on oil and glittering with gold. And soon, very soon, we will add, ‘powered by gas’.
These were the colourful words of Petroleum Minister Fabian Pok in his keynote address to the PNG Petroleum and Energy Summit held in Port Moresby last week, stressing the importance his ministry attached to increased domestic gas usage in the country.
Outlining the contents of a white paper on the oil and gas industry, Pok said that the new policy would strive to introduce best practise in the industry, get the citizens of PNG more directly involved in it and drive the electrification of PNG through the use of domestic gas. A new ministry would be set up to administer this, should the white paper’s provisions be written into law.
He described the white paper as “a critical juncture” for PNG, saying that the huge success of the PNG LNG project had reduced the perception of political risk in the country.
“I therefore welcome potential new partners and take this opportunity to thank the companies, led by majors ExxonMobil, Total and supported by long-standing Oil Search, as well as other companies operating here.
“It is important that we work in harmony and with respect for each other and in this context welcome others wanting to come on board. We are a determined country and are doing our utmost for all parties in all sectors,” Pok said.
This white paper, Pok said, was formulated as a result of lessons learned from the PNG LNG project operated by ExxonMobil.
“It is time to make sure that PNG’s policy and legislative frameworks are designed so that PNG and its citizens are more fully and directly involved in our country’s natural gas industry,” Pok said.
He told delegates that the white paper was with the National Executive Council for approval before it is tabled in parliament. He said that further consultations on the white paper would take place before the September-October sitting of parliament.
Some of the recommendations included:

• An investment framework and robust third-party access regime for strategic gas pipelines and related infrastructure.
• A domestic market obligation over domestically produced gas of up to a certain percentage of national gas production, pro-rata across all producers
• A flexible and responsive national content requirement to ensure that gas explorers and producers maximise on the amount of locally available and sourced labour and content in their operations in PNG.

Pok said that the government would not issue any new petroleum development licence, or enter into any gas agreement, until these policies had been implemented.
The changes in policy would not be retrospective, but would apply three projects – Pasca A, the off-shore facility in Gulf Province, P’nyang gas in Western Province and the Elk-Antelope in Gulf Province. These three were still currently exploration projects which had yet to receive development licences.