As talks between ExxonMobil and Papua New Guinea’s State Negotiating Team over the P’nyang gas project reach their nominated ‘walk away’ deadline today, the Prime Minister, James Marape, said he is confident that LNG will help underpin economic growth in the country for the next decade.
Speaking at a business breakfast in Port Moresby yesterday, Prime Minister James Marape was upbeat about the long-term prospects of LNG in the country, while at the same time raising the possibility that the US$10 billion Total-led Papua LNG will proceed regardless of the outcome of negotiations for P’nyang.
The State is in talks with ExxonMobil to try to negotiate better terms from the P’nyang Gas Project but the lack of an agreement ahead of the deadline of January 31 is leading to much uncertainty in PNG’s business community.
Indeed, Petroleum Minister Kerenga Kua this week foreshadowed the possibility of P’nyang negotiations falling over, telling The Australian newspaper:
‘I have cautioned the people of PNG not to hold their breath. We will give negotiations our best shot but at this stage I would rather advise the people of PNG to prepare for the failure of negotiation between the two sides.’
‘Total, at the highest level, has given the indication that, in the worst-case scenario that the third train discussion fails, then the two trains that they need will go ahead.’
Marape reassured a packed crowd of business people that he was not concerned about the seemingly stalled talks.
‘Discussion on P’nyang, our possible third train, are going on right now and we intend to conclude the discussion at the very earliest.’
He added that he was not directly involved in the talks.
Papua LNG to proceed alone?
Marape explained that he wanted a deal that was ‘not harmful to investors but also not harmful to citizens,’ reminding his audience that his shareholders were ‘the eight million people of PNG’.
‘We are working with our partners, especially ExxonMobil and their team, to ensure that a third [LNG] train is added to the two trains already running in our PNG LNG Project,’ he said. ‘The possibility of five-train LNG in our country looks positive, whether it is from P’nyang or other fields.’
Marape went on to say that he was confident that French ‘super-major’ Total would still invest in its Papua LNG Project in the event of no deal over P’nyang.
‘Total, at the highest level, has given the indication that, in the worst-case scenario that the third train discussion fails, then the two trains that they need will go ahead, so this is some element of security,’ he said. ‘Five trains of LNG will help me achieve my dream of going past a K200 billion kina economy in ten years.’
The Prime Minister also said that the ‘low-hanging fruit’ of New cast Mining and Harmony Gold’s Wafi-Golpu copper-gold project in Morobe Province and the renewal of Barrick Gold’s mining lease for the Porgera gold mine were also close to a resolution.
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