Gulf Pipeline LO’s receive LNG benefits

Landowners from Segment 7 of the PNG LNG Project Pipeline in Kikori, Gulf Province, will today receive K20 million in royalties and equities.

The Benefit rollout is the first since the signing of the Umbrella benefit Sharing Agreement (UBSA) in 2009 and the first flow through and shipment of LNG in 2014.

This follows the completion of landowner identification, the opening of clan bank accounts, and the election of directors to the board of their landowner company.

It was a historic occasion with Petroleum Minister, Kerenga Kua, and Gulf Governor, Chris Haiveta, accompanying Mineral Resources Development Company (MRDC) Managing Director, Augustine Mano, to announce the benefit roll out in Kikori on Wednesday.

Director of Segment 7, Wauro Oumabe, said it has been a long time coming for the 37 Major Clans who will have their bank accounts credited today.

The K20 million includes Project Royalties between 2014 – 2018 and Equity Dividends from 2014 – 2016.

The rollout to Segment 7 will be distributed as per the law with 40% given in cash while the remaining 60% is split through Community Infrastructure Trust Fund (CITF) and the Future Generation Trust Funds (FGTF).

Governor Haiveta urged his people to reflect on those who have passed on without recovering their benefits and urged the people to share equally.

Minister Kua urged the people to use the CITF an FGTF monies responsibly for the future.

The first certificate and confirmation of bank accounts was presented to the Hapape Clan of Kopi Village.

Chairman, Paul Opeis said the cash benefit will be used to venture into businesses.

The Benefit Roll out is the start of delivering benefits earmarked for the PNG LNG project pipeline landowners starting this year.

Landowners of the 679km Pipeline from Hides to Caution Bay outside Port Moresby live in remote villages in Hela, Southern Highlands, Western, Gulf and Central provinces.

Since 2014, royalty and equity benefits have been held in trust pending the completion of landowner identification, opening of bank accounts, and election of directors to landowner company boards.

In the last three years, the MRDC, the Department of Petroleum and Energy, Kumul Petroleum Holdings Limited, and Bank South Pacific combined to complete the process.

After delays caused by disputes between clans and tribal fights in parts of Hela, the process is now complete, paving the way for the benefit roll out.

The landowners are divided into 8 segments, with segments 1 – 6 living in Western, Hela and Southern Highlands, segment 7 in Kikori, and segment 8 in Central province.

The royalty payment for the pipeline landowners is for years 2014 – 2018 and totals K31.3 million, while equity payments total K23.16 million and is for years 2014 – 2016.

Combined, it totals K54.26 million.

The landowners of segment 6 (Gobe), however, will not receive their benefits as they have disputes pending in court. Their benefits will remain in trust pending the outcome of the disputes.

Meanwhile, greenfield landowners in Hela and Western province have various disputes pending in court. This has delayed bank account opening, and election of directors.

Therefore, the benefits they are entitled to remain in trust.

Mr. Mano said MRDC wants to replicate for the pipeline landowners the kind of community infrastructure projects and investment that are changing lives for the better in the plant site area in Central province.

The plant site, or portion 152 landowners, have been receiving their benefits since 2017 as they were the first to meet all the requirements of the Oil and Gas Act.

These landowners have so far received K33.67 million in royalty, and K21.54 million in equity benefits, totaling K55 million

Of this, K21.9 million has been distributed as cash benefits, K16.6 million spent on infrastructure projects in the community, and K21.9 million invested in high value equities and government securities, and the Dirio Power Project.  

“For the people of Papa, Lealea, Boera and Porebada, we have delivered a rural hospital with modern facilities, new classrooms and teachers’ houses for schools, a new water supply system, and dinghies to improve sea transport.

“These community projects are making life a lot better for the people living there.”

Mr. Mano said MRDC was working with their landowner trust company to make prudent investments, and these investments were already delivering good results.

“These investments were returning 12% or better, and that is very good. The plant site landowners hold 12.5% shares in Dirio Power, a project with a better rate of return than most big projects that people talk about. Dirio will secure their future, as it will be in the forefront of the government’s drive to increase household access to power nationwide in years to come.

“The pipeline landowners will also take up shareholding in Dirio Power,” Mano said.

Cedric Patjole