PARLIAMENT on Friday unanimously (79 MPs) passed the enactment of the new Oil and Gas Papua LNG Project Amendment Bill 2021.
Minister for Petroleum, Kerenga Kua while presenting the Bill before parliament clarified that the new Oil and Gas Papua LNG Project Amendment Act 2021 only concerns the Papua LNG Project Gas Agreement and any application for a Petroleum Development License for the Papua LNG project and not any other gas agreement, project or Petroleum Development License in Papua New Guinea.
The Oil and Gas (Papua LNG Project) Amendment Bill 2021 clarifies the amendment to the Oil and Gas Act (1998) made by the Oil and Gas Amendment Act No. 11 of 2020.
“I refer the amendment to the Oil and Gas Amendment Act 1998 made by the Oil and Gas Amendment Act 2020 No. 11 of 2020 as the 2020 amendments.
“The changes brought about by the 2020 amendments do not create any inconsistencies with the Papua LNG Gas agreement.
“The Papua LNG project participants are currently progressing the technical work necessary so that the two Papua LNG project Liquification trains may proceed within the PNG LNG project site at Caution Bay,” Kua explained.
He said that once this is complete and following the start of FEED (Front End Engineering Design), they will submit an application for a Petroleum Development License.
In addition, given the significant capital intensity of the Papua LNG project which will be around US $10 billion (K30 billion) to US $12 billion (K36 billion), Kua further clarified that it must be financed using a combination of debt from lenders and equity from the project sponsors or the joint venture partners.
The Oil and Gas Papua LNG project amendment Act of 2021 is limited to:
- Reinstating Oil and Gas Act (1998) provisions affected by 2020 amendments to apply as if they had not been amended in relation to the Papua LNG Project Gas Agreement and any application for a Petroleum Development License for the Papua LNG project.
- Renders the Oil and Gas Act (1998) provisions affected or inserted by the 2020 amendments in applicable to the Papua LNG project Gas agreement and any application for a PBL for the Papua LNG project.
The Act gives comfort to the Papua LNG projects sponsors and financier so that Papua LNG project may progress towards FEED in line with the mutual agreed timetable announced in May 2021.
