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Sir Moi warns licencees
PETROLEUM and Energy Minister Sir Moi Avei has called on present and potential investors in the PNG Gas Project to respect the Government’s gas commercialisation strategy. He said in Port Moresby yesterday these investors must also abide by the terms and conditions of their respective petroleum licences. Sir Moi said the Government would not allow the project to be jeopardised by the commercial brinkmanship of licencees who may be pursuing an agenda contrary to PNG’s national interest and contrary to the interests of other licencees in the gas project fields. He said the viability of the project had been subjected to increasing pressure due to escalating construction costs, particularly in relation to the gas delivery pipelines in Australia. The costs blow-out has also been the main reason behind the recent withdrawal of the APC consortium as the developer of the Australian pipeline. “The cost escalations are totally beyond the control of the Government and reflected the marked inflationary pressures in the global energy market,” Sir Moi said. “Due to the highly competitive nature f the energy market in eastern Australia, which has access to cheap coal and coal seam methane energy sources, the capacity to offset these costs blowouts by increasing the price of gas to customers was limited.” Sir Moi said despite these challenges, the project’s aligned private parties had been working closely together to identify measures to offset the cost increases. One of the options had been to re-route the Australian pipeline to more attractive market locations such as Mt Isa in western Queensland economising on the design and structure of the Australian pipeline delivery systems, replacing APC as the Australian pipeliner and renegotiating gas prices and volumes at selected locations. He said the revised gas sales and pipeline development program for the PNG Gas Project was expected to be finalised over the coming weeks. Sir Moi said he would be meeting with senior ExxonMobil executive in the USA to discuss the revised program for the project. “Any project of this magnitude of the PNG Gas Project presents major challenges and with the support of its commercial partners these challenges can be managed together, we can ensure that the project is a success,” Sir Moi said.