Gearing up to export billions of kina worth of gas


The PNG Gas Project to tap, condition and transport rich gas reserves from the rugged mountains of Southern Highlands to hungry energy markets in Australia, is expected to cost K8.3 billion.
But additional operational costs over its 30-year life will add up to another K8 billion, making this the biggest commercial project ever undertaken in Papua New Guinea.
The project cost includes the building of roads, 42 bridges, a state-of-the-art gas production facility at Hides, a central gas control facility in Kutubu, along with the design and laying of a gas pipeline from Hides to the PNG's border with Australia's Queensland State.
This was revealed by the project manager, ExxonMobil, during an environmental road show held in Hides, Moro, Kutubu, Gobe, Kopi and other areas in the Gulf and Southern Highlands provinces last week.
According to an ExxonMobil executive, the pipeline link to Australian-based customers will be over 3,000 kilometers long, making it the longest pipeline in the Southern Hemisphere.
Three pipelines will be built to supply natural gas and glycol from the Hides production facility across the Tagari River to Idauwi and from Angore, south to Homa. From Homa, the pipeline will follow existing roads to Kutubu.
Saleable gas will flow from the Kutubu central gas conditioning plant to Kopi in Kikori and through to Omarti River and on to Queensland.
The PNG Gas Project will bring substantial benefits to people on both sides of the Torres Strait.
For Australia, it will deliver a cost-effective long term energy source to commercial customers in Queensland, the Northern Territory, New South Wales and South Australia. It is also expected to facilitate new investments, particularly in mineral processing at industrial centres such as Gladstone.
An ExxonMobil environmental and regulatory executive, John Rullman, told landowners the PNG gas is a low greenhouse intensity fuel that will assist Australia's efforts to limit its growth in damaging carbon dioxide emissions.
According to environmental scientists with the DEC, the project required an Environmental Management Plan before it can be allowed to proceed and ExxonMobil was required to submit an environment impact statement report (EIS) to the Government.
This report was submitted in March last year and a follow up consultation have been held with the Department of Environment and Conservation (DEC).
The EIS delegation included officials from DEC, Asian Development Bank, ExxonMobil, Enesar environmental consultants, Esso Highlands, NGOs and representatives from Southern Highlands and Gulf provinces. They visited the gas field last week in two teams.
Team one visited areas in the Hides, Moro and Kutubu, while team two visited Gobe and areas in Gulf province.
In Hides, the delegation could not conduct the environmental road show as well heads 1, 2, 3, and 4 had been declared a no-go zone by landowners.
The delegation however, proceeded to other areas. Much discussion with landowners centred on environment-related issues.
Many concerns and experiences had to do with oil pipeline construction and the current operations.
The presentation by Enesar highlighted that the fact that the construction phase of the pipeline would be a short term activity and that the environmental impact will be limited and localized.
"The impacts will be localized and manageable," Enesar's Greg Terrens told villagers. "We have recommended more than 100 mitigation strategies to the government on how to manage the impacts".
The consultants did not rule out the possibility that indirect impacts on the environment and social lives of the people could extend beyond the development footprint.
These impacts include fire, migration of people to the development areas, the problems of dieback, weeds and animal pests, which could be long term problems. This will require consistent and prolonged monitoring and management of the project by the state and the developers over the project life.
According to officials from DEC, a technical assessment report will be presented to the Environment Council which will make its final recommendation to Environment and Conservation Minister William Duma. Once approved by the Minister, the operational environment permit will be issued for work on the project to commence.
Project construction will last two to three years and saleable gas is expected to flow in 2009.

*The National reporter Philbert Aisaisa traveled to Gulf and Southern Highlands as a guest of the Department of Environment and Conservation.