Landowners demand clarifications from KCH

The Wellhead Landowner leaders are demanding the Kumul Consolidated Holdings (KCH) to clarify the payment of the 4.27% Kroton equity in the PNG LNG Project.

The Petroleum Development License (PDL) wellhead and facilities landowners include Greenfield PDL 1, 7, 8 and 9 and Brownfield PDL 2 and 4.

The leaders in a joint statement said they needed clarification from KCH on this issue.

“We cannot comprehend why KPHL would now demand the Beneficiary Group to pay a massive US$26I million for every one per cent indirect equity on the 4.27% in the same project,”  Landowner representative and Chairman of PDL 1 Dickson Ango said.

They said KCH have fixed a headline purchase price proposition for the landowners at US$1.116 billion (K3.54 billion).

“This is not in the spirit of benefits sharing, We feel this is extortion,” Ango said.

The landowners said the purchase would see the Beneficiary Group comprising the 8 PDL(s) wellhead and facilities landowners, pipeline landowners, the downstream facilities and LNG plant-site landowners together with their respective Provincial Governments own a consolidated direct equity interest of 7.05%.

“Broken down this is the equity option of 4.27% and the free-carry interest of 2.78%. 

“Regardless of the frustrations that we have had to endure since the National Government first proposed to sell down our option as announced in the National Budget 2014 we remain steadfastly committed in our desire and aspiration to own DIRECT interest in the PNG LNG Project.

“We have made a firm offer to buy our reserved equity option in the PNG LNG Project and we are not asking the National Government to give it to us for FREE as this appears to be the governments new policy to mining and petroleum resource projects.”

The landowners, whose customary and traditional lands hold and contribute in excess of 95% of the total gas volumes of 10.5 trillion cubic feet (tcf) have formally offered to a purchase price of K725Million (US$230million) to acquire direct equity ownership and interest of 4.27% from the National Governments 16.58% in the PNG LNG Project.

Freddy Mou