PNG Has Potential To Expand In LNG

August 18th, 2017 | Post Courier

BY MELISHA YAFOI

Papua New Guinea has a huge potential to expand in the liquefied natural gas area.
Oil Search managing director Peter Botten said this yesterday during the business breakfast with the Prime Minister Peter O’Neill.
Mr Botten outlined that PNG was in a tremendous position to expand in LNG production because it has more fully discovered gas resources.
He said the fields have more than 10 tcf of gas available for new investment with six and half which will be in the Elk Antelope field and extra resources from the PNG LNG fields, and Pyn’yang to add to the production value.
He said LNG can positively impact the economy with the right environment because both oil and gas can then double over the next five to seven years.
However, he said the prerequisite is for developers to be directly engaging with landowners and the country to ensure surveys are being done and fair distributions of have been made to all parties from existing projects.
Mr Botten stressed that the industry now must demonstrate the value of the projects and their value in distribution.
“We certainly need to improve our benefits for our projects and when new projects can be contemplated. Benefits delivery from the PNG LNG must improve and landowners must be paid.
“The money is there, some has already being paid and the barriers with the distribution must be removed.
Over K3 billion has been paid by the project in royalty, development levy and equity distribution to state landowners since 2014,” he said.
Mr Botten said that the oil and gas market is oversupplied due to global oil and gas prices which is relatively low as a result the market is expected to remain oversupplied early into the next decade.
He said that is a competitive scene with a growing demand for the PNG LNG market because of the low prices which will attract new customers.
“The reality is that without these sanctions of new LNG projects over the next four years or so there will be shortage of LNG by the middle of the next decade, and prices will rise as a result the economic position of the billion kina project and the financing of it will continue to be challenging.
“Discussions have commenced on further expansions of LNG and developments on Papua LNG might occur. It is now essential for the new government and all stakeholders for the next phase of the industry’s development,” he added.

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