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PNG Central Bank Governor Bakani clarifies LNG funds

Staff Reporter | 7:51 PM |
THE Bank of PNG has clarified that it does not have any trust account for revenue from the PNG LNG project - but has only one  for landowners’ royalties from the project.
Governor Loi Bakani told The National that the trust account for the landowners’ royalties had about K108 million in it, which would be distributed after the completion of the Government’s mapping exercise on landowning units in the LNG-impacted areas.
“I want to clarify that there is no trust account for the LNG revenue. The accounts we have are for landowners’ royalties only,” he said.
“Landowner royalties are safe. Only when they (Government) finish the mapping exercise of the landowners then we will pay - on instruction from the Government.”
Opposition leader Don Polye this week sought a clarification from Bakani on whether the proceeds from the sale of the PNG liquefied natural gas were kept in a trust account with the Central Bank.
Bakani said: “Most revenues coming from LNG are not parked with BPNG.”
Bakani said companies involved in the PNG LNG were given exemptions to keep their money in off-shore accounts.
“Only when these companies want to pay their local commitments,  they bring the funds to PNG,” he said.
The PNG LNG project partners are ExxonMobil PNG Ltd (33.2 per cent), Oil Search (29 per cent), National Petroleum Company PNG (16.8 per cent), Santos (13.5 per cent), Nippon Oil (4.7 per cent) and Mineral Resources Development Company (2.8 per cent).
The Government had revealed plans to transfer the PNG LNG revenue to a Sovereign Wealth Fund which it had established “for future generations”. A bill on that was passed in Parliament in July. 
The National Petroleum Company PNG is responsible for managing the State’s equity participation in the project. 
Managing director Wapu Sonk could not be reached for comment last night. But he had said earlier tax from the project was paid to the Internal Revenue Commission, while royalties and development levies were paid to the Treasury through the Department of Petroleum and Energy.
Last month, Bakani had assured the people that all revenue streams from the PNG LNG project had been paid by the operator on time, as per the PNG LNG project agreement.
He said the landowner royalties were paid by the operator into the trust account with  BPNG.  
“To date about K108 million in landowner royalty payments have been deposited by PNG LNG into a trust account set up by the Government with the Bank of PNG,” he said.
“The money has been safeguarded for landowners. Multiple government signatories are required before the money can be released.”  
Bakani had also said the operator of the PNG LNG project paid its first development levy of K73.8 million on March 27 this year. 
“In addition to royalties and development levies, the State is directly benefiting from the PNG LNG project thought equity dividends paid by the operator to the National Petroleum Company of PNG and direct and indirect taxes,” he said. The National