Papua New Guinea begins landholder LNG royalty payments

Sept. 14, 2017
The government of Papua New Guinea has started paying local landholders royalties from the ExxonMobil Corp.-operated Papua New Guinea LNG (PNG-LNG) project.

The government of Papua New Guinea has started paying local landholders royalties from the ExxonMobil Corp.-operated Papua New Guinea LNG (PNG-LNG) project.

PNG-LNG has now been exporting gas for more than 3 years and a 2% royalty has been set aside for eligible landholders in the project areas. Payments, however, had been delayed because there had been numerous disputes over the precise identity of the eligible parties.

The royalties have been held in trust by the national government while it carried out the vetting process that became a prolonged affair that caused some violent clashes. Some incidents, especially those in the Hides area near the gas processing plant, threatened to disrupt the project operations.

Prime Minister Peter O’Neil made the resolution of landholder disputes one of its priorities in a 100-day plan set out following its reelection in July.

According to ExxonMobil, the royalty payments have started flowing, beginning with groups around the LNG plant near Port Moresby.

There still needs to be resolution of landholder disputes in the highlands, nevertheless, before the entire payment system is up and running.

This final step for PNG-LNG royalties will create a positive precedent for dealing with landholders surrounding the Papua LNG project at Elk-Antelope fields as the joint venture led by Total SA heads towards a final investment decision.