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ExxonMobil secures PNG gas for $9.5bn, eyes Chinese custom

ExxonMobil secures PNG gas for $9.5bn, eyes Chinese custom

Port Moresby: Papua New Guinean landowners across the sites where the ExxonMobil-led Liquefied Natural Gas project will be built have signed a crucial multi-billion dollar benefit sharing agreement.

After five weeks of intense talks with up to 1000 resource owners, relevant provincial governments and PNG's national government agreed to a 20 billion kina ($9.5 billion) deal over the 30-year life span of the LNG project.

The signing secured landowners and provincial government seven per cent equity in the multi-billion dollar project.

That figure comes from PNG government's 19.4 per cent equity in the project that ExxonMobil estimates will double the country's gross domestic product through taxes and gas sales.

Southern Highlands Governor Anderson Agiru was one of the key negotiators with PNG's cabinet ministers.

"We have cut a good deal,'' he told PNG's National newspaper.

"This deal now sets new parameters and new benchmarks in state and landowner relations,'' he said.

Part of the agreement includes the PNG government committing to infrastructure and socio-economic developments in the provinces and specific licence areas.

A highway will be built from the PNG's south to the north, parallel to the pipeline that will pump gas from the Highlands region to the coast for shipping and then processing in Port Moresby.

Upgrades to other local infrastructure such as airports and townships have been agreed to as part of the deal that needed to be brokered before the whole project could move forward.

The $US12.5 billion ($16 billion) ExxonMobil-led project plans to commence gas production by 2014.

Over the weekend there were reports that China was likely to be the first major customer for the gas with PetroChina in discussions to take 3m tons a year.  [25/05/09]


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