PNG-LNG is another ExxonMobil milestone: but who will benefit?
25 March 2014
JOE FORMEX WASIA
THAT huge transformational enterprise, the Papua New Guinea liquefied natural gas project operated by ExxonMobil, has reached another milestone when late last week it switched on its turbine at the Hide gas conditioning plant for testing and commissioning.
This marked another milestone after four years construction work at different sites. The US$19 billion PNG LNG project is now more than 95% complete and remains on track to deliver its first product in the second half of this year.
In the eyes of many, especially local communities, employees and contractors, it may mean something less than when they first saw the flames at the plant site, but it is quite an achievement.
The current gas flow is from Oil Search’s Kutubu central processing facility in the Southern Highlands to Hides. The Kutubu gas project has been in operation for more than 20 years now, being originally constructed and operated by Chevron Niugini Limited and later taken over by PNG’s leading oil company, Oil Search, about 10 years ago. During this period of the project, the companies extracted only oil.
The project construction phase will end in few months when the final touches are made to refinery, pipeline and conditioning plant at Hides. The plant construction in Hides is now about 98% complete and spine line connections are expected to complete in few weeks.
The plant construction teams als have started mass demobilisation. This affects some 19, 000 workers as the construction phase come to an end. Very soon PNG will have massive revenue flow and the country’s GDP is expected to double
The PNG Government, the project operator ExxonMobil, its co-venturer Oil Search and other partners in the project will have full smiles on their faces in the next couple of months.
In a country dominated by rugged mountains, deep valleys, fast flowing rivers, rough seas and swamps, it’s never an easy task for such a huge project but they have made it through.
It is expected that Papua New Guinea will have steady economic growth as we move into the operational phase of the project. However, fog and clouds surround the PNG side of the project - will PNG’s very own natives, the resource owners, benefit from the huge amount of money being earned from their resources?
If our government, elected members of parliament, bureaucrats and contractors continue to abuse their roles by involving in corrupt practices, we will have no one else to blame for ruining our nation and its future.
People - I am carrying out a Resettlement Action Plan development benchmarking in East Africa, Uganda.
I want to find out the company that developed the Resettlement Action Plan for the LNG PNG pipeline project.
Posted by: Moses Muwanga | 15 October 2014 at 06:56 PM
Hi Joe
some critical and valid points. keep writing in this area as it is important for the country.
I concur with you entirely on the following:
"If our government, elected members of parliament, bureaucrats and contractors continue to abuse their roles by involving in corrupt practices, we will have no one else to blame for ruining our nation and its future."
On related areas, I think the LNG Project did provide opportunities for employment of nationals. Lets go further and beyond the figures being thrown around and look at the net value of employment. How many of our people were in managerial and technical positions...maybe few.
Nationals are probably shadowing or understudying foriegn skilled personnel and hopefully over time, some will take over.
The LNG Project in a way also brought to the fore the issue about shortage of technical and skilled Papua New Guineans. We just did not train and equip enough nationals.
Now PNG is also waking up from a slumber. Where previously there was not much emphasis on TVET education and SME, government policy and programs are shifting the emphasis in this area. Lets hope that real progress can be made in these areas.
ExxonMobil is and will soon decommission most of its workers: I think it is preparing them for a life after they are decommissioned.
Posted by: John Kaupa Kamasua | 25 March 2014 at 05:01 PM
With the increase in gun trade, landowner clashes on regular intervals and corrupted politicians, community leaders and people, the LNG is not that promising.
Risk of sabotage on the LNG assets is high from unsatisfied landowners.
Posted by: Leonard Roka | 25 March 2014 at 11:51 AM
Thanks Keith for clearing that point. Yes, total number of employees in this multi-billion project is around 19,000 and more than 8,000 nationals.
Thousands of PNGns will be jobless again after all construction works completed as only few people will go to the operation.
So sad
Posted by: Joe Wasia | 25 March 2014 at 10:57 AM
Do those figure amounts (19,000 or 8,000) relate to overall workers including foreigners or just nationals?
Peter Graham told me in 2011 that for every foreigner working in the field on this project, there is a national shadow being skilled up.
On another note, when the gas starts being pumped down the pipeline, the risk of sabotage by disgruntled landowner or other groups must surely increase. One expects the security industry may continue benefiting from this.
__________
Good point, Johnny. Further research reveals that, at peak employment, 9,000 Papua New Guineans were working for PNG LNG, which makes Joe's 19,000 number plausible. PNGn employment has since been reduced to 5,600. As you and Leonard point out, this is highly likely to result in serious downstream issues - KJ
Posted by: Johnny Blades | 25 March 2014 at 07:41 AM
Wasia - Nice briefing and excellent statement on doubts on the PNG side. Everyone is concerned who will benefit when corruption is well established...
19,000 workers shall have their contracts come to an end. Where will PNG put them after all they have already acquired skills in numerous areas.
Very bad picture around a billion dollar investment.
Posted by: Leonard Roka | 25 March 2014 at 05:27 AM