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PNG LNG – tough grinding work with a very big outcome

JOE WASIA | Supported by the Bob Cleland Writing Fellowship

THE LIQUEFIED NATURAL GAS project in the Hela and Southern Highlands Provinces of Papua New Guinea is one the world class oil and gas projects developed by the giant Exxon Mobil Corporation.

The lifespan of this project is 30 years in its operational stage. It is expected that during this period the GDP of this struggling nation will be multiplied and LNG will be a pillar of its economy.

The initial cost estimate for the project stands at $US15.7 billion dollars. However the latest cost estimates indicate it may be more.

It has a four year construction phase with all works expected to be completed by 2014 according to the agreement made between the PNG government and Exxon Mobil Corp. 

Exxon Mobil, a US company, has a 33.3% share while Oil Search, an Australian company, owns 29%. The PNG government, respective provincial governments, local level governments and the resource landowners share a 22.5% stake.

The construction works on different sites are now winding down and only a few contractor companies remain. CCJV completed its civil works late last year. The offshore pipeline construction was completed by Saipen, an Italian company, last September.

The offshore pipeline is 407 kilometres long, starting from the Napa Napa oil refinery in Port Moresby and ending at Kikori in the Gulf  Province.

From there a 445 kilometre onshore pipeline goes to Hides in Hela Province. This pipeline construction has 70 kilometres to go to completion. Spiecapag Niugini Limited, a French company, aims to complete its works around September or October this year.

Onshore pipeline construction is not that easy. PNG has a lot of fast flowing rivers, rugged mountains, deep valleys, swamps and hard rock that this onshore pipeline has to overcome. The workers put in 12 hour days and work 7 days a week with no public holidays or whatever.

To make situation worse, the attitudes of the local people, especially those from the Hela region, towards the construction company are not good.

There are many demands, road blocks, thefts, hijacking of equipment, threats, sexual assaults and more. This will, I believe, delay the construction works from its predicted date.

After the construction work is completed, the PNG LNG project will have its first export in 2014. And that is when the country’s GDP will be doubled.

If the government and responsible agencies effectively manage the high revenues with transparency and good governance I believe the nation will feel the beneficial effects from this great resource.


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