LAWMAKERS FAST TRACK PNG-AUSTRALIA GAS PROJECT

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PORT MORESBY, Papua New Guinea (The National, May 4) – The Papua New Guinea Parliament has passed amendments to the Oil and Gas Act to fast track the PNG gas project to export gas to Australia in 2009.

[PIR editor’s note: See previous stories for background and developments on the gas project.]

The amendment received overwhelming support from both sides of the House, with the main concern raised about the government’s failure to honor previous agreements with landowners and the provincial governments.

Deputy Prime Minister and Minister for Petroleum and Energy Sir Moi Avei told Parliament that the PNG gas project was absolutely fundamental to the future economic growth and prosperity of Papua New Guinea.

"We need always remember that this project is the biggest capital investment in our history – expenditure on the project in Papua New Guinea alone will be equivalent to PGK8 billion [US$2.7 billion]."

The amendment passed included licensing provisions, which will have a life span of 25 to 30 years to ensure the tenure over the petroleum development licenses and pipeline licenses are secured for the life of the project.

Sir Moi said the "security of tenure" was a fundamental requirement for both investors and lenders to the PNG gas project.

"The amendments are necessary to facilitate the borrowing program of both the government and private parties to the project," he said.

He said changes would allow affected landowners from various projects, which will become part of the gas project, to enter into a consolidated agreement with the state under the development forum process. The amendments also relate to additional rights of entry of a licensee and the introduction of a provision relating to the pre-submission of information.

Sir Moi explained that with regard to the additional rights of entry, the gas project licensee will need to enter upon private land to undertake "temporary operations" under the early works program.

He said the amendment would expand the existing provisions for temporary operations under the Act by giving the minister authority to approve activities in relation to, or in preparation for, construction works.

On the pre-submission, Sir Moi said it would help streamline approval processes for the project as well as future projects in the oil and gas sector.

He said the amendments would ensure the PNG gas project moves forward to the final stages of approval, notably project sanction and financial close.

May 4, 2006

The National: www.thenational.com.pg/

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