Prime Minister James Marape has officially launched the Papua LNG Project Benefit Sharing Process, describing it as a major milestone towards the project’s Final Investment Decision (FID) later this year.
PM Marape called on the National Government, provincial governments, local-level governments, landowners and project partners to work together to ensure the process was transparent, inclusive and delivered lasting benefits to all legitimate stakeholders.
“This process must be fair, transparent and inclusive. Every rightful beneficiary must have a place at the table, and no genuine issue should be left unheard,” he said it in a statement last week.
The Prime Minister said the benefit-sharing process was one of the final requirements before the multi-billion-kina Papua LNG Project could proceed to its Final Investment Decision.
He said successfully concluding the consultations would give project partners the confidence to move into the construction phase.
“This process is one of the final and most important steps before FID. Once we complete it successfully, we will give investors the confidence to proceed and unlock one of the largest resource investments in our country’s history,” Mr. Marape said.
He acknowledged Petroleum Minister Jimmy Maladina, the Department of Petroleum and Energy, Kumul Petroleum Holdings Limited, Mineral Resources Development Company, provincial leaders from Gulf and Central, landowner representatives and project partners TotalEnergies, ExxonMobil and Santos for supporting the process.
Mr. Marape said the Government was applying lessons learnt from the PNG LNG benefit-sharing negotiations, which involved more than 60,000 landowners across upstream, midstream and downstream project areas.
“No Prime Minister understands this process better than I do because I was directly involved in the PNG LNG negotiations from the beginning,” he said.
“We understand the complexity of balancing the aspirations of landowners, provincial governments, investors and the National Government, and we know the importance of getting this process right.”
The Prime Minister assured landowners in Gulf and Central provinces that their legal entitlements were protected and said the consultations would ensure all legitimate beneficiaries were properly identified.
He reaffirmed the Government’s policy that 40 per cent of the State’s equity participation in future resource projects would be transferred to project provinces and landowners.
“For Papua LNG, the State will fully exercise its 22.5 per cent equity option and, consistent with our policy, 40 per cent of that equity will be returned to the affected provinces and landowners,” he said.
Mr Marape urged all stakeholders to approach the discussions in the spirit of unity, warning that Papua New Guinea was competing with other gas-producing nations for global investment.
“The global energy market has changed significantly. Papua LNG is competing with much larger gas developments around the world.
“We must seize this opportunity while market conditions are favorable. If we miss this window, we cannot assume another one will come quickly,” he said.
The Prime Minister also thanked TotalEnergies Chairman and Chief Executive Officer Patrick Pouyanné and ExxonMobil Chairman and Chief Executive Officer Darren Woods for their continued commitment to Papua New Guinea, saying the project had overcome challenges including the COVID-19 pandemic, rising construction costs and project redesign.
He said the long-term benefits of Papua LNG would go beyond royalties and equity returns.
“The true legacy of this project will be better roads, schools, hospitals, jobs, business opportunities and a stronger economy for future generations,” Mr. Marape said.
“We are planting a tree today whose shade may be enjoyed more by our children and grandchildren than by ourselves.”
“Let us work together, complete this process successfully, achieve Final Investment Decision later this year and deliver Papua LNG for the benefit of all Papua New Guineans.”