PNG WANTS ACTION ON EXXONMOBIL GAS PIPELINE

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By Yehiura Hriehwazi

PORT MORESBY, Papua New Guinea (The National, Jan. 16) – The Papua New Guinea government plans to ask ExxonMobil to show cause why it should not be kicked out of PNG over the delay in fast-tracking the US$4 billion PNG-Queensland gas pipeline project.

Petroleum and Energy Minister Sir Moi Avei said this when responding to a series of questions from Wewak Member of Parliament Kimson Kare, who asked why ExxonMobil was dragging its feet on the project and why the Government was not fast-tracking the north-bound gas project to Wewak.

Mr Kare also asked if Australians were deliberately delaying the pipeline project so that they could develop their own gas field or pipe in gas from the Timor Sea to supply the eastern coast of Australia.

He said while PNG was "pussy-footing around", the Australian government was working vigorously to secure all the Asian gas markets and even piping LNG from another country (Timor) to be processed in Darwin and sold overseas when PNG could do the same with the north-bound gas pipeline.

Sir Moi said in response that it was only a matter of time before a pipeline will be built from Western Australia to pipe gas to the east coast markets of Australia where PNG was also planning to pipe gas to.

"That’s the reason why pressure has been put on ExxonMobil, Oil Search Limited and Santos to try and get the south-bound pipeline moving as fast as possible."

He said ExxonMobil was working hard to try and secure another customer to come on board to give the necessary volume to start on the Front End Engineering Design (FEED).

"Now that the two years is up, I am writing to ExxonMobil a virtually show-cause letter that they have to tell the government of Papua New Guinea whether they are going to do this project to the south or not," Sir Moi told Parliament.

"As far as the government of PNG is concerned, the commercial requirements have been met," he said adding that once another customer signs up, "the rate of returns are there for ExxonMobil to make a positive decision with the other members of the consortium," he said.

"I am still very optimistic that a positive decision will be made by February" to get the US$4 billion (K16 billion) south-bound gas project moving.

In relation to the north-bound pipeline to Wewak, Sir Moi said the government has already granted a Canadian company an exploration license to seek more gas reserves in the Sepik area and two other companies have also expressed interest in the pipeline project to Wewak.

He said one is a company called Trigas, an American-Indonesian company and the other is the Indonesian giant, Pertamina, which is also interested in the north-bound pipeline from Southern Highlands.

Sir Moi said his departmental head Joe Gabut had already had discussions with the East Sepik provincial administration with the possibility of securing land for the LNG plant in Wewak.

January 16, 2004

The National: www.thenational.com.pg/

 

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