|Friday, 22 February 2013|
DESPITE the doubts and unexpected delays affecting various project sites, the $US19 billion PNG LNG Project appears on track to deliver first gas, and export LNG, by the middle of next year. By Wantok
Much of the negative publicity even before construction began in 2010 came from the Australian media, which openly doubted PNG's ability to complete the project sometime in 2014.
Landowner issues mainly involving failures on the part of the national government to promptly deliver promised business and infrastructure grants were a major cause for concern.
Once construction got underway in 2010 it soon became clear ExxonMobil had not carried out adequate geotechnical work on the 3.2km Komo airstrip with discovery of excessive amounts of clay beneath the soil – which proved to be a major deterrent to construction.
Several months of uncertainty ensued before it was confirmed that Komo could still provide the airstrip to enable the Antonov aircraft to fly in several essential loads of equipment for the Hides Gas Conditioning Plant.
There were other unexpected events that created uncertainty, including the widely reported major landslide near Tari in early 2012 that claimed at least 25 local lives according to some estimates. Work had to stop for a few weeks as a result.
Nevertheless the project is on track for commissioning and final completion by June next year and could be finished even sooner in line with the original plan to complete the project in the first quarter of 2014.
At this point in time the LNG plant, on the outskirts of Port Moresby, is probably somewhat ahead of schedule. As soon as the final nuts and bolts are in place it will be ready to receive commissioning gas from the Associated Gas Project managed in PNG's oilfields by Oil Search.
The offshore portion of the gas pipeline stretching over 700km from Hides to the LNG plant has already been completed and tested and the onshore section has already made its way past Kutubu and is currently on its final stretch. Possibly the onshore pipeline, alongside a fibre optic cable, will be completed by the middle of this year.
In its latest quarterly announcement Oil Search said it was ready to supply commissioning gas by the end of this year, making it all the more plausible that exports could well commence in the first quarter of 2014 or by June at the latest.
As always the major danger to the timing of the project are not the joint venture partnership or even the landowners but the national government, which has inadequately handled landowners issues for which it is responsible.
In recent weeks Petroleum Minister William Duma's Department of Petroleum and Energy has been inviting applications from people who will carry out social mapping for parts of the project area. This is a task that should have been completed prior to project approval.
The LNG project joint venture had completed and submitted its social mapping for the entire area by around the middle of 2009 but the Department had failed to endorse the work at this time leading to continuing uncertainty that is apparently now to be addressed.
Meantime, project construction is making solid progress and the PNG LNG JV has carried out immense work in the areas of landowner engagement and socio-economic programs designed to lift living standards among the 65,000 people within its project area.
Clearly, if the Antonov aircraft arrive on schedule in the next couple of months, it would be quite feasible for the project to be completed, and for exports to commence, during the first quarter of next year. Otherwise mid-June appears highly achievable.
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