With a host of other LNG projects on the horizon for Papua New Guinea spelling expected injections of capital revenue, Westpac’s senior economist forecasts developers will take it slower this time to get the right formula.It in midst of experiences during the country’s first LNG project, Westpac senior economist Justin Smirk, said respective developers have drawn lessons from the issues faced by ExxonMobil and its partners regarding landowners and the economy as a whole, following the end of the first LNG construction phase.
“Joint venture partners are very keen to get it right. They have seen difficulties in the past particularly around negotiating with the landowners, and the problems that causes for them.
“And they are determined this time to make sure it is done correctly and they don’t have problems coming back.
“In terms of the information I am getting through in of the enthusiasm on the projects. It is hard to get the projects done in a short period of time.
“Because they want to do it right, it is likely to be delayed, then we are talking a two-year window at least,” Mr Smirk said.
He said structural issues within the country is a result of the steady growth and the tight situation in the financial markets.
“With the sort of tightening around the budget fiscal position, domestically it means you are going to get a slow growth period,” he said.
“While I look to the horizon and say two years out- these big investments are going to provide some really interesting relief.”
Mr Smirk said the two-year window would provide a critical period that will enable the Papua New Guinea government to see how it manages its finances.
“They will also try and relieve some of the pressure on small businesses struggling amid a weak kina,” he said. source: Post Courier