US$9bil P’nyang deal set

 

February 18, 2022The NationalMain Stories

PRIME Minister James Marape says a deal on the country’s third liquid natural gas (LNG) project is expected to be signed next week.
He said cabinet had cleared the P’nyang Gas Agreement, which now awaits signing between the State and developer – ExxonMobil.
Marape told The National yesterday that the US$9 billion (K30bil) P’nyang standalone project would be integrated with the multi-billion dollar PNG LNG project.
The P’nyang agreement closely follows another multi-billion agreement made two weeks ago to reopen the Porgera gold mine.
The US$5.4 billion (K18.5 billion) Wafi Golpu project is expected to be announced next week, Marape said.
On a PNG LNG project related matter, Marape mentioned Santos Ltd’s positive indications of additional equity, based on his request to Santos, if they offload equity in PNG LNG as a result of their acquisition of Oil Search assets.
He commended Santos chief executive officer Kevin Gallagher for the good indications thus far, saying this should recompense PNG parties in PNG LNG for dilution of their interest to only 19.6 per cent instead of the 22.5 per cent required by law.
“We started a protracted negotiation that included detaching P’nyang from Papua LNG terms and moving onto a separate template to gain more for the State but at the same time, giving respect to our investors’ return on their investments,” Marape said.
“After almost two years of exchanges, I think we have found the sweet spot where investors will be happy and PNG beneficiaries, including the Western government and landowners, will be happy.”
Marape said the State team had secured total state equity to be at 34.5 per cent above the 22.5 per cent allowed by the Oil and Gas Act.