FOREIGN CONTRACTORS LINE UP FOR PNG GAS PROJECT

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At least 20 firms overshadow local applicants

PORT MORESBY, Papua New Guinea (The National, April 27, 2010) – At least 20 international companies are already vying to be subcontractors in the plant construction of the Papua New Guinea (PNG) liquefied natural gas (LNG) project.

Although this information has not gone down well with PNG companies and those based in the country, major contractor Chiyoda-JGC Joint Venture (CJJV) says they have to adhere to the timeline pertaining to the construction phase of the project.

[PIR editor’s note: Chiyoda Corporation and JGC Corporation – (CJJV), is both Japan's leading engineering and construction firms who have been awarded a joint contract. The scope of the work is for a 6.6 million tons per annum LNG plant, with two trains, including facilities for inlet processing, treating, liquefaction, storage, and loading. The PNG LNG Project is an integrated development that includes gas production and processing facilities, onshore and offshore pipelines and liquefaction facilities.]

Chiyoda’s external affairs director Takumi Hoshino said they were yet to award contracts to some of the international companies that had started talks with them and no company had been awarded contract to date.

"We have to construct accommodation very fast to cater for mobilization and to cater for 8,000 to 9,000 workers," he said in relation to the camp facility proposed for Portion 152 on the outskirts of nation’s capital.

"The subcontractors (have) informed that they will bring into PNG pre-fabricated goods for construction," Takumi said, much to the disappointment of the representatives of PNG companies that attended the four-day workshop between local businesses and engineering, procurement and construction (EPC) contractors last week.

This was at the Enterprise Centre of the Institute of Banking and Business Management (IBBM) at Konedobu, Port Moresby.

Some of the attendees were particularly concerned that the subcontract business opportunities during the construction phase may be given to international companies.

"What opportunity have you given to PNG companies to participate in the LNG project?" one attendee asked.

In response, Mr. Takumi said as main contractor CJJV (EPC3) was ready to maximize in giving opportunities to companies to be subcontractors.

"There has to be quality control and experience. Then they will require a lot of work to do here so they will subcontract here (PNG)," he said of the vying international subcontractors.

A response which got a participant to challenge ExxonMobil to put in place a monitoring system to make sure such contracting of PNG companies by international subcontractors did take place.

"I do not think you can do everything because you have no experience … you never constructed a LNG plant before," Mr. Takumi told the gathering.

The plant construction is scheduled to start in August/September following the site preparation set to start in June and the LNG training facility at Port Moresby Technical College will take care of training for local workers.

He said the engineering and procurement (EP) work was currently being done by about 100 engineers in Yokohama.

Mr. Takumi also revealed that Landowner Company (lanco) Laba Holdings Ltd would engage in labor recruitment of most of the 2,000-2,500 local workers for the construction. It is also contracted to provide security.

And CJJV will recruit 200-300 local staff for its 600 total staff ceiling for its main to be established at portion 152.

"We have to engage with a local company. All recruitment will be done by the representative lanco," he said adding CJJV had consulted Department of Labor and has a manager in charge of recruitment.

Other opportunities available to lancos are: camp maintenance, camp catering, and transportation of workers from camps to job sites.

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