PNG Provinces Impacted By LNG Project Accept 4.27 Percent Stake

Options to finance the equity being explored

By Jeffrey Elapa

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Dec. 15, 2016) – The five impacted Provincial Governments of the PNG LNG Project have accepted their 4.27 per cent stake in the project offered by the State through the Kumul Petroleum Holding Limited.

The three governors also signed the head of governments agreements yesterday to go with the vendor financing option while other options and processes could be pursued later.

Southern Highlands Governor William Powi, Hela Governor Francis Potape and Central Governor Kila Haoda met with the landowner for a presentation by an independent consulting team from Sydney engaged by the provincial governments to ascertain the best option for the landowners to take.

Gulf Governor Havila Kavo and Western Governor Ati Yabiro were absent,

They also engaged the consultant team to see if there were possibilities for them to secure financing backing from commercial banks to finance the equity.

After the presentation by Clinton financing group, the provincial governments and the landowners agreed to go with the vendor financing option of the State as they did not want to miss out on the opportunity to take ownership of their resources through the equity participation.

Southern Highlands Governor Powi, who has led the team with Mr Potape, said the landowners and the provincial governments could not lose the rights to ownership when the dateline (December 31) lapses, which was only eight days away for any financing option.

He said after the presentation that he was clear what option to take and the best option now is the vendor financing of the state which is more relaxed with a flexibility to break ties and with a very low interest rate.

"If anyone has the best option and comes with the money now then we will all go with that.

"The 4.27 per cent is not a direct option and all banks cannot allow us to borrow because we do not have ownership by has equity through Kroton."

PNG Post-Courier
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