Friday, 15 May, 2020
The National Executive Council (NEC) has endorsed the Pasca Offshore Gas/Condensate Project submission , and is ready for negotiation to take place to complete a gas agreement with the developer, Twinza Oil (PNG) Ltd .
In announcing the decision today, Prime Minister Hon. James Marape said NEC has also agreed to the composition of the State Negotiating Team (SNT) led by Minister for Petroleum Kerenga Kua, which remains the same as that of the Papua LNG & P’nyang Project.
The team consists of,: Chairman, Chief Secretary to Government, Deputy Chairman, Department of Petroleum & Energy Secretary; Department of Treasury Secretary; Managing Director of Kumul Petroleum Holdings; Office of the State Solicitor , State Solicitor; Managing Director of Mineral Resource Development Corporation; Governor of Bank of Papua New Guinea; Commerce and Industry Secretary, and Internal Revenue Commission , Commissioner General.
Prime Minister said NEC further approved funding for the operations of the SNT and direct the Team to commence and conclude negotiations for the signing of a gas agreement over the next couple of weeks.
“Cabinet recognises and approves Kumul Petroleum Holdings Limited (KPHL) to be nominated as the State Nominee, and KPHL is at liberty to decide whether to take up to the statutory equity of 22.5% in the Pasca A project.
“Based on the Open Book Economic Model the Pasca A Project cost projection ranges between US$2.5 to US$3.0 billion to commercialize the Gas resources with a provisional exploration expenditure (or sunk cost) of US$87.8 million,” Mr Marape said.
The project is expected to provide better overall returns for the 10 to 12 years project production life span and while it is (relative to the PNGLNG and Papua) a small project it is expected to contribute significantly to our economy over the life of the project.
“For consistency purposes, the Gas Agreement must be signed before a Petroleum Development Licence (PDL) is granted,” Prime Minister Marape said.
Meanwhile, the Conservation and Environment Protection Authority (CEPA) has issued an environmental permit after the developer Twinza Ltd had satisfied all of its environmental requirements.
This permit is valid for 25 years from March 2017.
Mr Marape added that, Social Mapping and Landowner Identification Studies (SMLIS) were completed some years ago, and as previously stated, Pasca A acreage is located 95km offshore, beyond the 3 nautical miles artisanal fishing zone and the 12 nautical miles commercial fishing zone but within the Gulf Provincial government waters.
Pasca A is the first of its kind where due to the distance from traditional fishing zone, there are no landowners.
Mr Marape said in view of the impact of the coronavirus (COVID-19), the government is working hard to ensure that once everything returns to normal, projects such as the Papua LNG, P’nyang, Barrick and Wafi Golpu are lined up and ready to foster much needed growth and development in the country’s economy.
“I am pleased that Pasca A Offshore Gas and Condensate Project is one such project among them,” Mr Marape said.
Twinza Oil (PNG) Ltd was awarded the petroleum prospecting licence in October 2011 for PPL 328 and PPL 584, and has met all the requirements of the Oil and Gas Act of PNG.