Papua New Guinea has formulated a new white paper on the oil and gas industry, stressing the importance of increasing domestic gas usage in the country.
Petroleum Minister Fabian Pok used his keynote address to the Papua New Guinea Petroleum & Energy Summit in Port Moresby last week to say that the new policy is aimed at introducing best practices in the industry throughout the country and urging more citizens to become directly involved to drive the electrification of Papua New Guinea through the use of domestic gas.
Pok added that a new ministry would be established to administer this when the white paper’s provisions were written into law.
He said the huge success of the PNG-LNG project has reduced the perception of political risk in the country and pointed out the importance of harmony and mutual respect between government and the companies involved in the industry.
The white paper, he said, was formulated out of the lessons learned from the ExxonMobil Corp.-operated PNG-LNG project.
Recommendations in the document include setting up an investment framework and robust third-party access regime for strategic gas pipelines and related infrastructure; putting in place a domestic market obligation over domestically produced gas up to a certain percentage of national gas production, pro-rata across all producers; and providing a flexible and responsible national content requirement so that gas explorers and producers maximize the local labor and content in their operations.
Changes in policy will not be retrospective, but they will apply to three proposed projects that have yet to be issued with development licenses: the offshore Pasca A gas facility in the Gulf of Papua, the P’ynang gas development in Western Province, and the Elk-Antelope project in Gulf province.
No new petroleum development licenses or gas agreements will be entered into until the new policies have been implemented.
The white paper is currently with the National Executive Council awaiting approval before it is tabled in parliament. Further consultations on the white paper will take place before the September/October parliamentary sitting.
