The Exxon-Mobil liquefied natural gas project is to be constructed at an estimate of U$18 billion and the company projects it will double PNG’s gross domestic product - source.
The scheme involves gas and oil extraction from sites in the Southern Highlands and Western Provinces, transportation via a 650km pipeline, firstly overland and then under the sea, to Port Moresby where a liquefaction plant and shipping terminal are being built.
Links:
LNG Watch - the voice of concerned Papua New Guineans, LNG Watch is unashamedly critical in perspective, its aim is to help keep governments and resource operators accountable to the public.
BankTrack.org - PNG LNG project
Jubilee Australia - PNG LNG project
The project will exploit undeveloped petroleum resources in the Hides, Angore and Juha fields and associated gas resources in the currently operating oil fields at Kutubu, Agogo, Gobe and Moran.
The project is estimated to produce 6.6 million tones of liquefied natural gas per year and will have a 30 year lifespan. The first cargo is expected to be exported in late 2013 or 2014.
Twenty year sales and purchase agreements have been signed with Japan’s Osaka Gas Co (1.5mta); Tokyo Electric Power Co (1.8mta); China Petroleum and Chemical Corp (2.0mta); and China Petroleum Co of Taiwan (1.3mta)
The project operator is Esso Highlands Ltd, a subsidiary of Exxon-Mobil. Exxon holds a 33.2% stake in the project, Oil Search 29%, the PNG government (through IPBC) 16.6%, Santos 13.5%, Nippon Oil 4.7%, PNG landowners (through the Mineral Resource Development Co) 2.8% and Petromin 0.2%.
The Export Import Bank of the US (Eximbank) has approved $3 billion to support US exports for the project and will finance the project together with other export credit agencies and 17 commercial banks.
An estimated 80% of the construction workers will be expatriates and mostly male which creates risks including increased violence and STDs in local communities and more burdens on community health, human services and other social infrastructure. PNG has one of the most serious HIV epidemics in the Asia-Pacific region. The impact of HIV/AIDS can be a two-way catastrophe, with increased exposure from expatriate workers to local people and from local people to expatriate workers, many of which then move on to projects in other countries - read more
The PNG LNG project includes a 248 km pipeline, much of which will penetrate previously undisturbed primary tropical forests with biodiversity of global significance.
2,809 hectares will be cleared, half in areas not previously disturbed by oil and gas development - source
The United States Export Import Bank estimates the project will emit 3, 100, 000 tons of CO2 every year in direct emissions [source], yet even this figure omits the much greater indirect (lifecycle) emissions associated with LNG schemes which include pipeline transport, a liquefaction plant, the tanker transport, re-gasification and ultimate combustion of this fossil fuel. According to a Carnegie Mellon study, lifecycle greenhouse gas emissions for LNG projects are more comparable to those of coal than conventional natural gas [source].
There are also fears of a shortage of public servants as they leave their current jobs to take up LNG positions - source
In Port Moresby whole housing developments have been snapped up by the project developer for staff - source - leading to sky rocketing rents and a housing crisis for ordinary working people.
The acting Police Commander in the Highlands has called for an extra 1,000 police to keep order around the LNG sites in the Highlands were normal police numbers are just 118 - source - indicating that the project is going to have huge security implications and PNG’s law enforcement agencies will struggle to cope with a project of this size.
The disputes and deaths suggest that free prior informed consent from indigenous landowners has not been obtained and that project monies could already be being used by villagers to arm themselves with illegal guns.
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