THE next phase of gas development in Papua New Guinea must contribute significantly to the Government’s commitment to deliver affordable electricity to cities, towns and villages, Prime Minister Peter O’Neill said yesterday.
He said the Government was not expecting gas resource proponents to meet the cost of the delivery of electricity “but we will be expecting domestic gas reservation and conversion to electricity will be a part of new proposals put to us for consideration”.
“I believe that affordable and reliable access to electricity needs to be the next ‘benchmark’ when it comes to improving the living standards of our people – no matter where they live,” O’Neill said at the opening of the PNG Petroleum and Mining Seminar in Port Moresby.
“And affordable and reliable electricity and energy generally is an essential requirement for the commitment to grow our small to medium enterprise sector to be delivered not only in cities, but in towns and rural communities across PNG.
He outlined the Government’s “priority areas” for the next and future phases of petroleum sector development.
“In the medium term, that can be provided by new power generation plants – located in areas close to gas fields, and delivered to communities by modern transmission means that may need to be provided by a partnership between gas resource developers and our own electricity authority, or other private sector providers.”
O’Neill said with the PNG LNG project heading towards completion, the Government must ensure maximum diversification, including stranded gas development
“We cannot rely on LNG alone, important and valuable though it is,” he said.
“We must ensure the next phase of our petroleum sector development includes stranded gas development that can meet domestic power and energy needs, and industry development in our regions, and especially in less developed regions.
“And industry and government must work together to attract significant investment in downstream processing industries, and high energy using industries, so we can expand our industrial base, create employment and boost exports.”
O’Neill said the Government would be looking favourably at investors who were prepared to contribute to the communities their resources were located in such as schools, health centres, and sporting fields and community services.
Favourable consideration would be given to projects that added value and contributed significantly to developing local communities in the long term and not just during construction periods.
“That means we want long-term residential and commercial centres and communities to be developed.
“We have been very generous in allowing fly-in fly-out arrangements – as a maturing economy we need to manage that area carefully in the future. And we need to ensure that petroleum sector development genuinely contributes to regional development and the growth of new centres of population.”
He told the seminar the petroleum and gas sector was effectively “underwriting” the Government’s 2014 budget deficit.
He said with the first export of liquefied natural gas next year, PNG’s gross domestic product would soar to 20%, which would be among the highest in the region and the world.