EXXONMOBIL PLANS $878 MILLION PNG HIGHWAY UPGRADE

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Critical link to $10 billion gas project

By Todagia Kelola PORT MORESBY, Papua New Guinea (PNG Post-Courier, July 12, 2011) – ExxonMobil and its development partners are expected to inject more than 2 billion kina [US$867.7 million] to upgrade the Highlands Highway during the construction stage of the Papua New Guinea Liquefied Natural Gas (PNG LNG) project.

And Works Minister Mr. Peter O’Neill yesterday told his department to quickly prepare a cabinet submission to seek approval for funding to be sought and the government to put down its share of the repair work on the lifeline and arterial piece of infrastructure that is so vital for the economic well-being of PNG and the PNG LNG project The cost of maintenance of the Highland Highway was made known during a briefing between the Exxonmobil and the government team led by Works Minister Mr. Peter O’Neill in Port Moresby yesterday.

ExxonMobil’s senior project manager for Development Support Mark Hackney said the company was working in close co-operation with the Department of Works to ensure that that the vital road link to the LNG project is given its critical maintenance and maximum support.

During the brief presentation of what Exxonmobil was doing to help with the highway repair program, Mr. Hackney explained that the developer depended greatly on the highlands highway because it is critical to their logistics and supply operations to and from the project site.

"Given the importance of the Highway to the project and the country, we are working closely with the Works Department to support critical maintenance and repair works and to provide a detailed engineering study on the future of the Highway," said Mr. Hackney.

ExxonMobil is helping the Works Department in three phases: the near-term, mid-term and long-term basis.

The near-term involved an engineering study of the road, mid-term involved injection of US$400 and by the time the road was completed, the LNG project should be also up and running in production. Total cost of highway maintenance was put at US$1 billion (K2.3 billion).

Mr. O’Neill was impressed with the briefing and told the ExxonMobil officers that the highway was a major concern for the National Government and the Works Department.

He said at present, there seemed to be a band aid maintenance approach to the entire highway.

But he assured the investors that the National Government "is very serious in ensuring that the highway is capable to accommodate their need".

He urged his officers to liaise with the developers so that they can come up with a framework and technical plan and a submission for him to present to Cabinet so that funds can be either sourced from external agencies so that work can begin as soon as possible.

Works Secretary Joel Luma said the department will be treating this important highway as a stand-alone infrastructure project because with the LNG project coming up there needs to be a redesign of the entire highway.

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