Tax Revenue From PNG LNG Expected in 2019
BY: TONY SII
Papua New Guinea should see revenue in terms of tax from the PNG LNG Project trickle into the national coffers at the back end of 2019.
Treasury Secretary Dairi Vele said this in response to a question raised by a member of the audience at the 2017 PNG Update forum held at the University of Papua New Guinea yesterday.
The question related to why the PNG LNG Project construction phase had been completed and while a number of overseas shipments had been made, but there was no resulting revenue to the State to be used to benefit the people.
“We are thinking at this stage with how they are going and how much they are earning, we would like to think that at the back of end 2019. We would like to think they are selling more and the prices were locked in a while ago,” he said.
“Everybody, including the State, borrowed K14 billion that time to K19 billion to build this project. The repayment period is about eight to nine years and I was just reminded last week that that time is just about up,” Mr Vele said.
He said unlike oil that experience price fluctuation daily with immediate expenditure on a good day, it takes a long time for LNG with 12 to 21 year contracts.
“It costs US$25 million (K79 million) to put one hole in the ground to check for LNG and you have to dig five of them so you spend US$125 million (K398 million) hoping you get something and then you try and wait 21 years to get your money back. In PNG LNG time we brought that down to eight-nine years and hopefully we start to see some of that tax.”