THE
Government has explained its position on the second LNG project operated
by InterOil Corporation.
Minister for Petroleum and Energy William Duma said the Government has suspended
the notice of intent it issued to terminate the Gulf LNG project agreement.
“On 31 May 2012, Minister Duma, the Minister for Petroleum and Energy, issued a
press statement relating to the notice of intent to terminate that was issued by
the State on 11 May 2012 under the terms of a project agreement that had been
entered into between the Independent State of Papua New Guinea and Liquid
Niugini Gas Limited (“LNGL”), an affiliate of InterOil Corporation on 23
December 2009,” a released statement said.
“The Intent Notice was issued as a consequence of the State’s desire to ensure
that the LNGL project (which uses gas from the Elk/Antelope Gas Fields) was
developed in a manner which was consistent with the Project Agreement and with
State’s strategy of maximising the long term financial and developmental impact
of the petroleum sector on the economy of the Independent State of Papua New
Guinea.
“The Intent Notice triggered a six-month consultation period between the State
and LNGL in relation to actions to be taken by LNGL to ensure that the LNGL
project is developed in the manner the parties had already agreed.”
Minister Duma said since issuing the Intent Notice, representatives of the
Department of Petroleum and Energy, the Department of Treasury and the
Department of Justice have had a number of constructive meetings with
representatives of InterOil and LNGL.
He said these discussions have now reached a stage where the State has agreed a
basis for suspending the Intent Notice, in order for representatives of the
relevant Departments to fully brief the Prime Minister and the members of the
National Executive Council (the “NEC”) on the progress that has been made since
the NEC last considered the LNGL project.
He said accordingly, the State has agreed to suspend the Intent Notice until the
NEC has considered the status of the LNGL project.
Mr Duma outlined that the State’s objective has been and continues to be to
ensure that:
1. the LNGL project is developed in a way which has a positive impact on the
financial position of the State and on economic and business activity of our
Nation;
2. the Nation builds upon the experience and capability developed from the PNG
LNG Project; and
3. the LNGL project is sequenced and structured in a responsible manner to
ensure that the project is positive for our Nation and its people.
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