Papua New Guinea begins paying LNG royalties to landowners

The government of Papua New Guinea has started to pay local landowners royalties from the $19 billion ExxonMobil-operated PNG LNG project.

Landowners have protested several times over the LNG royalties and equity in the project.

The PNG LNG project has been exporting the chilled fuel since April 2014 with a 2-percent royalty set aside for landowners, but payments had been held up by disputes over who is eligible.

“Important progress has been made with the government of PNG commencing payment of royalties to relevant landowner groups around the PNG LNG Plant near Port Moresby,” ExxonMobil PNG said in emailed comments to Reuters on Wednesday.

Progress on resolving the disputes comes as a relief for ExxonMobil, France’s Total and their partners who are in talks to invest billions of dollars in new gas fields to double LNG exports from one of the world’s lowest cost sites, Reuters reported.

ExxonMobil owns 41.6% percent in the LNG project while Oil Search holds a 29 percent interest in PNG LNG, partly located in the Highlands region of Papua New Guinea.

The project includes a gas conditioning plant in Hides and liquefaction and storage facilities near Port Moresby with a capacity of 6.9 million tonnes per year.

In its second quarter report, Oil Search said that in June the PNG LNG project produced at a record annualized rate of 8.65 mtpa, nearly 25 percent above the plant’s nameplate capacity, with these high rates being maintained through July.

LNG World News Staff