PNG LNG project Continues normal production operations despite COVID-19

 Barry: Despite the disruption created by the Covid-19 this year, the PNG LNG project has continued normal production operations.

ExxonMobil, the project operator, has a long history of supporting healthcare within our communities in which we work.

Throughout the pandemic, we have continued to work with the Health Department and provincial health authorities on initiatives to raise awareness on the Covid-19 and the recommended health measures to prevent the spread of the virus while offering logistical support for Government health staff in remote regions.

This year, ExxonMobil PNG donated K1.2 million worth of medical equipment and supplies such as ventilators, defibrillators, personal protective equipment (PPE), thermometers and screening shelters to support local health workers in their effort to prevent the spread.

The safety of our workforce, their families and the communities in which we operate and live in continues to be one of our highest priorities, while maintaining the continuity of our business to meet PNG’s and the world’s energy needs.

The production levels were not impacted by the Covid-19 challenges due to the implementation of preventative and preparatory measures in all our work sites in accordance with the guidance from the state of emergency controller, Health Department, the World Health Organisation, the US Center of Disease Control, along with ExxonMobil’s global and well-established practices related to infectious disease outbreaks.

What are some of the challenges faced by the company this year?

The Covid-19 pandemic has impacted LNG demand across the world.

However, throughout this year, the PNG LNG project continued to operate normally, allowing us to meet contractual obligations of our customers and project stakeholders.

Across the company, numerous preventive and preparatory measures were implemented to ensure the safe continuation of production, as well as to protect our workforce, their families and the communities in which we operate.

Some of these measures included:

 EDUCATING our staff and contractors on pandemic risk reduction behaviours;

 POSTPONING non-critical activities and moving to Zoom meetings;

 INCREASING the frequency of cleaning services across our sites;

 TAKING the temperature of critical staff and contractors before entry to our sites;

 IMPLEMENTING physical distancing in the office and communal areas;

 MAINTAINING quarantine for all personnel working inside LNGP and upstream work sites; and,

 FOCUSING on personal hygiene practices.

We continue to be inspired by our workforce as they remain committed to adhering to guidance from the Health Department and following virus risk reduction behaviours for the long-term that will ensure the PNG LNG project continues to operate safely and generate revenue for PNG LNG stakeholders.

What were some of the major achievements worth mentioning?

The PNG LNG is the largest single investment in PNG.

Since 2014, over K10 billion has been paid to the country through taxes, landowner royalties, development levies and distribution to Kumul Petroleum Holdings and Mineral Resources Development Company (MRDC).

More than K2.5 billion has been paid to the State in taxes, with approximately K1.5 billion being corporate income tax.

More than K2 billion was paid to landowners and provincial governments and more than K5.5 billion to Kumul Petroleum Holdings Ltd.

We’ve spent approximately K15 billion in-country on goods and services in the construction and production phases of the PNG LNG project, where we have strived to help create, train and employ local businesses so they can in-turn grow to employ more Papua New Guineans.

Approximately K4 billion has been invested back into local landowner companies, including education and training programmes to help contribute to their growth and long-term success. We have executed K200 million of funding support for infrastructure projects along portions of the Highlands Highway in Hela since 2017, as part of the Government’s infrastructure tax credit programme.

Nine out of every 10 people of the PNG LNG workforce are Papua New Guineans, accounting for 3,900 of our workforce working across the PNG LNG project and 60 holding leadership roles within the organisation.

Over the past five years, more than 230 Papua New Guineans, which includes 25 per cent women, have been recruited through our operations and maintenance programme.

Across the PNG LNG project, we now have a higher percentage of women working in our operations and maintenance group than any other ExxonMobil affiliate in the world.

We are extremely proud that as of September, our control room technicians are 100 per cent Papua New Guinean citizens.

Their leadership and technical skills are central to the success of the PNG LNG project.

Today, the project supplies approximately 50 per cent of Port Moresby’s power through the supply of gas for power to NiuPower and through power generated at the LNG plant for PNG Power.

PNG LNG also worked with MRDC and other key partners to enable the commissioning of the Dirio power plant.

What was the total production for LNG this year?

The Hides gas conditioning plant in Hela and the LNG plant in Central continue to operate as normal.

Despite challenges associated with the Covid-19, our plants have been able to increase capacity output by about 20 per cent more than the nameplate capacity, providing additional revenue for the Government and royalties for landowners in PNG LNG license areas.

How much LNG was exported this year plus monetary value and gains?

ExxonMobil PNG continues to meet all contractual obligations, with cargo exports averaging nine per month in 2020.

What is the price movement for this year and what was is the outlook for next year?

As a matter or practice, we don’t comment on market speculation.

The company has invested K1 billon in all the impacted areas through various programmes. What are some of your key strategic investments next year onwards?

At ExxonMobil and the PNG LNG project, our overall goal is to be a good neighbour and a long-standing partner with the communities where we work.

Our approach to strategic community investment is based on partnership and participation.

We work with communities and government agencies to identify, define and prioritise potential programs that build the capacity of individuals and community institutions.

While 2020 has presented many challenges, we continue to invest in PNG’s future, as we believe there are many opportunities to grow through initiatives that enhance sustainable economic development – including programmes that focus on education and training, livelihoods support, agriculture, strengthening community resilience, women’s empowerment and infrastructure support.

Our community livelihood improvement programme continues to go from strength to strength.

Since 2015, more than 10,000 community members across Hides, Komo and Angore in Hela have participated in the project helping them improve their livelihoods and standards of living by generating household income from small enterprise development.

Fresh produce sales through the project have grown from K9,000 in 2016 to K194,000 in 2019 or roughly 8,000 kilogrammes per month.

There are some proposed government legislations which government is looking at. What is the company’s view on these legislations?

Our operation is not just essential to our contractual partners but to PNG as a country.

The contribution our operations and projects make to the country are felt on many levels and we remain committed to working with the Government to ensure the benefits of the PNG LNG project are experienced for the long-term.

To remain competitive in the global LNG market industry needs clarity and long term stability of fiscal terms to ensure PNG remains an attractive investment destination.

We look forward to working with the Government and all stakeholders to meet these objectives.

How has the extractive industry in general been this financial year and what is the outlook for next year?

The unprecedented events of this year have presented new challenges for the industry.

ExxonMobil PNG is just one of many organisations operating in PNG’s extractive industry and would suggest speaking with Neville Choi from the Chamber of Mines and Petroleum for a detailed discussion about this.

Any other comments?

Over the past decade, our partnerships with the Government, industry and the communities in which we work and live in continues to grow and deliver long-term benefits for the livelihoods of all Papua New Guineans.

Our LNG plant at Caution Bay recently celebrated seven continuous years without a loss time injury, a reflection of the perseverance and dedication the PNG LNG workforce has shown in ensuring our vision of “Nobody gets hurt” is achieved.

The benefits of PNG LNG will continue to ripple through the community for decades to come – from the revenue returned to the country, through to our business supply chain and our strategic community investments.

We continue to support the Government in creating opportunities that provide a catalyst for long-term sustainable growth and thank them for their continued support of the PNG LNG project operations. Their support has helped us to build a global reputation for being a reliable supplier of LNG to the world.


Next : KINGSTON Resources Ltd secures K33mil equity to advance Misima Gold project in PNG

Previous Post Next Post