Gas project: Engine to propel economy

THE PNG liquefied natural gas (LNG) project offers a means to unlock value from the extensive gas resources and has the potential to transform the country’s economy.According to an assessment of the direct and indirect impacts of the proposed LNG project on the economy by Australia-based analyst ACIL Tasman Pty Ltd, the LNG will boost gross domestic product (GDP) and export earnings, providing a major increase in government revenue, royalty payments to landowners, creating employment opportunities during construction and operation, and providing a catalyst to further gas-based industry development.The analysis, which was approved by ExxonMobil, indicated that the benefits from the project would spread throughout the economy as the government applies the earnings from its substantial share of the project revenues to social and economic programmes.The analysis said: “This LNG project has the potential to improve the quality of life in PNG by providing essential services and enhancing the country’s productivity.“Benefits would also flow through the economy as the wages and salaries of project staff are spent and as suppliers provide a range of goods and services to the project.“Landowners stand to benefit from direct payments of royalties on production of gas and associated petroleum products, as well as improved social and economic infrastructure.”ACIL projected that the potential direct benefits offered by the LNG project are expected to flow from the following:1) Capital investment in LNG production and support facilities;2) Upstream gas production and processing development, pipelines, storage and other infrastructure, employment, direct cash flows to government and landowners in the form of taxes, royalties, development levies and other charges; and3) Returns on equity participation, potential for increased petroleum exploration and production (E&P) activity in the country.