Prime Minister James Marape said this during the recent launching of the NiuPower Plant outside Port Moresby.
“By this time next year, PNG Power would have phased out high cost of diesel fuel run generators. I want power to be run off hydro and gas next year,” said Marape.
Marape said the Government’s goal was to reduce the cost of power by 50 percent.
He said with the addition of Dirio Gas and NiuPower Limited plant coming on board in 2020, this will reduce the cost of power greatly.
“We have one of the most expensive tariffs in the world. This is grossly and morally wrong when we have gas and hydro. The contribution by NiupPower and Dirio, working side by side, must drop tariff.”
Minister for State Owned Enterprises, Sasindran Muthuvel, said the use of gas in the medium term will enable PNG to set up long term power generation solutions like hydro.
“Gas generated power is an excellent opportunity for us in the medium term solution for the next 20-25 years, while we build hydro facilities in PNG as our long term solution.”
Meanwhile, the Prime Minister announced that the state’s share in the NiuPower Joint Venture, currently held by Kumul Petroleum Holdings Limited, will be transferred to landowner companies.
He said this is part of government’s intention for landowners to be involved in downstream processing activities while KPHL focuses on upstream activities or high capital intensive projects.
He said discussions are current being held regarding that transfer of ownership.
The NiuPower Project is a joint venture between KPHL and Oil Search Limited.
The NiuPower Plant currently generates 10 MegaWatts (MW) to the Port Moresby Grid.
It is expected to generate to its maximum capacity of 58MW before the end of the third quarter in 2020.
The NiuPower Plant is expected to save PNG Power between K80 – K100 million annually.