Papua New Guinea PRIME Minister James Marape has welcomed the outcome of talks on the P’nyang gas agreement he held with ExxonMobil executives in Texas, USA, calling it a win-win situation for both parties.
He and his delegation executed the heads of agreement (HOA) for the P’nyang gas agreement and an equity purchase HOA with ExxonMobil, represented by its upstream president Liam Mallon and senior executives.
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In addition to all the legal entitlements, the State’s take is 63 per cent, compared to 49 per cent in PNG LNG project, and 51 per cent in the Papua LNG project.
This is made possible by an increase in production levy of 3 per cent and the State equity (including the commercial purchase) at 32.5 per cent compared to just 19.6 per cent in the PNG LNG project and 22.5 per cent in the Papua LNG project.
“The project timing is sequenced in a way that P’nyang commences as soon as the Papua LNG construction is completed,” Marape said.
“This provides costs synergies which will (mean) certainty and opportunity to PNG businesses for a period of eight years of construction of the two projects.
“The P’nyang project model is different from the earlier model which was planning an additional train of gas.”
Marape was accompanied by Petroleum Minister Kerenga Kua, Justice Minister Bryan Kramer, Gulf Governor Chris Haiveta and Hela Governor Philip Undialu.
The gas agreement HOA captures fiscal, regulatory and licensing terms negotiated over the past two months. The equity HOA provided for the State to acquire at cost 10 per cent additional equity from ExxonMobil in the P’nyang project in Western.
Marape thanked ExxonMobil for its willingness to enter the talks “with an open mind to allow the best outcome for landowners and provincial governments”.
“We bring a partnership outlook into our discussions and I am pleased to note ExxonMobil’s willingness to help maximise benefits to all stakeholders. The terms of the HOA demonstrate this willingness in the most practical manner,” Marape said.
Statement
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