There is no clause in the PNG LNG agreement for domestic market obligation, this is the main reason why the country cannot downstream the LNG from Hela.
Minister for Petroleum and Energy Fabian Pok revealed this on the floor of parliament recently after being questioned by Finschhafen MP Reinbo Paita.
“Do we have a clear market domestic market obligation as a government?
“Do we have a clear energy policy to help reduce the price and cost of energy in the country?” said Paita.
Pok said the government, during the drawing up of the LNG agreement back in 2008 and 2009, had failed to include a clause which allowed for the LNG to be made available for the domestic market.
“That is why we can’t go into electricity generation and downstream processing because all the gas produced as per the LNG agreement is to sell offshore,” said the Minister for Petroleum and Energy.
Pok says the country needs to retain some of the LNG for power generation.
“For the country to grow, we need some domestic gas, which is much cheaper than diesel.
“The government negotiation team now, when talking with developers of the new gas fields, will insert a domestic clause for gas to be retained for the domestic market.
“However because of the Prime Minister’s persistence, ExxonMobil has agreed to set some gas aside for a 100 megawatt power generation plant to help solve the country’s power generation problems,” said Pok.