Huge project delivers more than gas for PNG

Papua New Guinea's biggest ever private sector investment, the massive US$19 billion PNG LNG Project

Huge project delivers  more than gas for PNG Huge project delivers  more than gas for PNG Huge project delivers  more than gas for PNG Huge project delivers  more than gas for PNG Huge project delivers  more than gas for PNG

ExxonMobil PNG Limited

Operated by ExxonMobil PNG, the Project is an integrated liquefied natural gas (LNG) operation with gas production and processing facilities that extend from Hela, Southern Highlands, Western and Gulf provinces to Port Moresby in Central Province.

ExxonMobil has a 33.2 percent interest in the project, with co-venturers Oil Search Limited, 29 percent; Kumul Petroleum Holdings Limited, which is the PNG State's official nominee for its equity interest, 16.8 percent; Santos Limited 13.5 percent; JX Nippon Oil & Gas Exploration 4.7 percent; and Mineral Resources Development Company Limited, a 100 percent State-owned company, 2.8 percent. The Papua New Guinea State and landowners together represent a 19.6 percent share in the Project.
The scope of the PNG LNG Project is large by any measure. It is tapping natural gas reserves from multiple fields spread across almost 200 kilometres. 700 kilometres of onshore and offshore pipeline were built to connect a new gas-conditioning plant in Hides and liquefaction and storage facilities northwest of Port Moresby. 
The first shipment of liquefied natural gas from the project was delivered to the Tokyo Electric Power Co. Inc. in Japan in May 2014 and last year the operations produced 8.3 million tonnes of LNG, an increase of 20 percent over the original design specification.

 he   roject workforce of 2600 has 82 percent apua ew uinean staff and 22 percent womenThe PNG LNG Project workforce of 2,600 has 82 percent Papua New Guinean staff and 22 percent women

The biggest nation in the Pacific, close to 90 percent of PNG's population live in rural areas and access to these widely scattered communities is often difficult, slow and expensive. 

To provide some details on the impact the PNG LNG Project is having on PNG's development we spoke to Andrew Barry, ExxonMobil PNG Managing Director.

Question: What benefits has the PNG LNG project delivered to the State of Papua New Guinea since its decision to proceed with this project?

Answer: ExxonMobil has been instrumental in driving economic growth by producing significant, lasting benefits. This includes billions of kina in development levies, taxes, royalties, equity payments, support to local business and jobs for local citizens.

But we are doing more than simply developing Papua New Guinean gas resources, we are developing people and creating long-term partnerships to deliver social progress that benefit local communities. During construction we employed more than 9,000 Papua New Guineans and delivered more than two million hours of training through some 13,000 training courses.

We are transferring skills that will benefit the country for many years to come. Today our workforce of 2,600 has 82 percent Papua New Guinean staff and 22 percent women. We have a workforce development program to provide Papua New Guineans with the experience and competencies needed to run the business in the future. Another area we have significantly contributed to is the growth in small to medium enterprises (SMEs) through our procurement strategies and supplier development training programs.

Our partnership with the Institute of Banking and Business Management (IBBM) Enterprise Centre in particular has assisted more than 19,000 entrepreneurs, supporting the development of capable, competitive service companies nationally. In local communities, we have invested more than PGK850 million to build infrastructure, develop social programs, and implement skills training to help improve the quality of life for Papua New Guineans.

This includes through women's economic opportunities, livelihood development through agriculture and small business development; youth leadership programs; support for education through teacher training, building, refurbishment of school classrooms, the provision of teacher accommodation and school boards leadership training.

Our support for local communities also included humanitarian relief in the aftermath of the recent earthquake and continued support for the restoration of roads and health and education services over the long term.

Question: Health is an important issue in Papua New Guinea, has there been any investment in improving the health of the community?

Answer: We are continuing to invest in improving health care services in PNG for people of all ages. ExxonMobil PNG has been involved in helping to build the national community health capacity through public-private partnerships, providing insights into the disease burden in the country and supporting improved paediatric treatment, maternal and public health capacity training.

At a community level our support of healthcare services includes donations of ambulances, infrastructure upgrades such as new maternal and labour wards in local health clinics, medical supplies, staff housing and installation of water tanks and solar lights to assist with a constant supply of clean water and electricity to the facilities.

Question: How does ExxonMobil manage the environmental aspects of a project with such a large footprint across 5 provinces?

Answer: Papua New Guinea is a country of unique biodiversity with a large proportion of its fauna and flora found nowhere else on Earth. We are playing an important role in understanding and protecting this unique environment. ExxonMobil PNG's biodiversity specialists have worked in consultation with the PNG Conservation and Protection Authority and conservation stakeholders to develop a biodiversity strategy and biodiversity implementation and monitoring program to outline how project-related impacts are assessed and managed.

Through the strategy, we created a biodiversity program to offset areas affected by PNG LNG and to protect varying forest types over the life of the project. Our biodiversity monitoring and conservation programs not only provide a better understanding of the species and ecosystems in PNG, but they have helped with the discovery of many new species of flora and fauna.

 he   roject liquefaction and storage facilities northwest of ort oresby The PNG LNG Project liquefaction and storage facilities northwest of Port Moresby

Question: What other opportunities are on the horizon for ExxonMobil in PNG?

Answer: We are pursuing many opportunities to grow our business in Papua New Guinea and deliver additional benefits to the country. We are a joint venture partner in PNG's second LNG project, Papua LNG, operated by TOTAL SA. This project is working towards the commercialisation of gas associated with the Elk-Antelope fields located in Gulf Province. We are also working with the Government of PNG on development plans for gas discovered in the P'nyang field, Western Province, operated by ExxonMobil. Alignment with the various joint venture interests is progressing for the processing of gas from these fields by developing additional LNG processing capacity at the existing LNG plant site near Port Moresby.

Dialogue is also ongoing with the PNG Government State Negotiation Team to progress the required gas agreements for the two projects ahead of decisions on FEED and FID.

Question: The 7.5 magnitude earthquake which struck the Highlands of PNG in February resulted in the government declaring a state of emergency in the Hela, Southern Highlands, Western and Enga provinces. What involvement did ExxonMobil PNG have with recovery support for affected areas?

Answer: Our knowledge of the communities and our logistics capabilities put us in a unique position to assist local communities, this is despite being impacted ourselves. We helped initially with humanitarian support - deliveries of food, water supplies, shelter and health items to communities in some of the worst affected areas. That has since transitioned to support for strengthening community resilience, including a focus on food security, health risk mitigation and education support.

We are assisting the government to rebuild infrastructure and key roads and bridges impacted by the earthquake in Hela and Southern Highlands provinces. We also recently announced a public private partnership aimed at developing a large scale commercial agricultural venture in the Hela Province which we hope will lead to opportunities for small enterprise development over the longer term. We are committed to working with our neighbouring communities as earthquake recovery efforts continue.

 t a community level xxonobils support of healthcare services includes donations of ambulances infrastructure upgrades medical supplies staff housing and facilities At a community level ExxonMobil's support of healthcare services includes donations of ambulances, infrastructure upgrades, medical supplies, staff housing and facilities