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PNG starts paying landowner royalties

The Papua New Guinea (PNG) Government has begun paying landowners their royalties in relation to ExxonMobil’s PNG LNG Project.

Local landowners have been set to receive a 2 per cent royalty from the PNG LNG Project, which has been exporting for more than three years now, after payments had been held up over disputes as to who was eligible for the royalties.

The process to determine who is eligible has caused violent clashes over the project’s three years of operations, with the royalty funds held in trust by the government while it vets applicants.

“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,” an ExxonMobil spokesperson told Reuters last week.

The beginning of the royalty process is a good sign for ExxonMobil and Total, who are looking to invest billions more dollars in PNG to double its LNG exports.

Total is looking to develop its own Papua LNG Project – a proposed multi-train LNG development, which includes concept selection, basis of design and front-end engineering design – with the development targeting final investment decision by the end of 2017.

The PNG LNG Project involves a two-train, 6.6 MMt/a LNG processing facility, developing the Hides, Angore and Juha gas fields, as well as associated gas from the Kutubu, Agogo, Gobe and Moran oil fields.

Gas is transported to the LNG plant near Port Moresby through approximately 850 km of large diameter pipeline, with first LNG shipped in June 2014.

Joint venture participants include ExxonMobil subsidiary Esso Highlands as operator (33.2 per cent), Oil Search (29.0 per cent), PNG Government (16.6 per cent), Santos (13.5 per cent), Nippon Oil (4.7 per cent), Mineral Resources Development Company (2.8 per cent) and Petromin PNG Holdings Limited (0.2 per cent).