5 Dec 2016

PNG govt looks to negotiate new terms with Exxon

12:09 pm on 5 December 2016

Papua New Guinea's government is looking to negotiate new fiscal terms with ExxonMobil as it eyes an expansion of its LNG gas project in PNG.

ExxonMobil's LNG Project cuts a swathe of development through Hela province in PNG's Highlands.

ExxonMobil's LNG Project cuts a swathe of development through Hela province in PNG's Highlands. Photo: RNZI / Johnny Blades

ExxonMobil, which began LNG exports from PNG in 2014, is understood to be wanting to add a third production unit to its current operations.

Reuters reports PNG's Treasurer Patrick Pruaitch as saying the government aimed to reach a deal with Exxon over new tax terms for expansion of the project in 2017.

This would be to ensure it goes ahead in time for an expected upturn in the LNG market from around 2020, when it's hoped PNG's revenue current shortfalls due to the global oil price slump would ease.

Mr Pruaitch, who said it was important to negotiate better terms for the country, said he was desperate to get hold of every available revenue to fund PNG's budget.

This includes government plans to raise around US$640 million by selling a 4.27 percent stake in the LNG project to landowners.

This plan has met with opposition by landowners and other beneficiary groups who feel it erodes the value of their equity in the project.

LNG Project facility, Central Province, Papua New Guinea.

LNG Project facility, Central Province, Papua New Guinea. Photo: RNZI / Johnny Blades

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