K500m to upgrade Jackson Airport: Polye

THE next five years will see an upgrading of the Jackson Airport at a cost of K500 million.Deputy Prime Minister Don Polye, who is also Minister for Works and Transport, said certain sections of the community had criticised the decision to upgrade the airport, describing it as wasteful.He said they must realise that the airport was the gateway to the country.“We cannot really talk about realising the full potential of tourism when the gateway to this country is substandard,” he told the Moss Capital (Pacific) PNG international conference on Monday.He said certain infrastructure and their proper maintenance were needed to enable development to take place.“Various programmes are currently underway to ensure that plans and projects in land reforms, land and maritime transport infrastructure are achieved.”He also gave an assurance that the National Airports Corporation would focus on improving the cash flow from commercial investments to ensure that the airport was profitable.Polye thanked the organisers of the conference which, he said, would further strengthen ties between the two countries.“As a government, we always welcome unlimited foreign investment into the country to capture the opportunities created by the LNG and other similar projects.“We are committed to maximising local content in all foreign investment, industry growth and entrepreneurial activities.“Ultimately, it is the intention of the Somare-Polye government to ensure that opportunities for wealth creation must be accessible to all Papua New Guineans,” he said.He said that as envisaged in Vision 2050, economic growth and wealth creation would come through agriculture, down streaming processing, enhanced manufacturing activities, infrastructure development and sustained delivery of goods and services.

Tosali: ’10 budget sees K533.3 million surplus

By ALISON ANIS
THE 2010 budget would have a surplus of K533.3 million, 2.1% of the gross domestic product (GDP), according to current estimates released by Secretary for Finance and Treasurer Simon Tosali.Tosali said the estimated surplus was due to the strengthening of global economic recovery and strong domestic economic growth.“The additional revenue of K533.3 available would be spent through a supplementary budget as government continues to have competing expenditure pressures such as the LNG commitments and legal obligations,” Tosali told participants at the three-day national development forum in Port Moresby organised by Consultative Implementation Monitoring Council (CIMC).He said total expenditure was expected to be K7.6 billion this year, with K4.2 billion in recurrent budget and just over K2 billion for the development budget.He explained the higher recurrent budget in 2010 reflected the expected overspends in personal emoluments, by national departments and provincial governments.“The Department of Treasury has taken action by establishing a payroll project team to investigate the causes of these overruns … it has also written to the heads of those agencies seeking their explanations of their overruns,” Tosali said.On the development budget, he said the increased development component is for the payment of remaining business development grants related to the PNG LNG project while grants and ITC had also increased this year.Tosali said total government revenue and grants of K1.8 billion was a lot higher than the outcome last year and this due largely to the higher receipts from the mining and petroleum tax (MPT) collected in the first of the year.The higher MPT estimate is due to an upward revision to commodity price assumptions.“PNG’s economy is expected to strengthen this year with the commencement of PNG LNG gas project and other mining-related projects as well as a rebound in a number o sectors following softer conditions last year.“In addition, growth is also expected to be supported by the improvement in global trade as commodity prices of PNG’s major exports strengthens on the back of growing confidence in the global economic recovery.”

Patel: More business ops here

PAPUA New Guinea is a country that still has a lot to offer in terms of investments and other business opportunities.Speaking at last month’s inaugural Pacific investment summit in Australia, City Pharmacy Ltd (CPL) Group PNG chairman Mahesh Patel said CPL group is committed to further investments through housing projects, cinema complexes, hardware business and various retail formats as the opportunity and demand for these were very high.Patel said the CPL group has so far set up City Pharmacy outlets in all Stop N Shop supermarkets in Port Moresby and other big supermarkets in the country and had also ventured into the building sector with their Hardware Haus.He said also they had signed joint ventures and affiliated themselves to other companies who have an interest in working in the country.He said to date, most investments had been limited to super funds, with Nasfund being the single largest investor in their group, and there were ample opportunities for various investment vehicles to do so.“There are opportunities for financial investors and businesses alike either in joint ventures, franchises, partnerships, supply lines or just business facilitation,” Patel said.He said with every challenge comes an opportunity which the CPL Group has capitalised on in terms of providing social, sporting and community services that have given their business the drive to work harder and earn double digit revenues year after year.CPL Group boasts a staff number of almost 2,000 (98% of whom are PNG citizens) and a group turnover in access of K300 million.The company was listed in the Port Moresby Stock Exchange in 2002 at a par value of K1 per share.Following a 3 to 1 share split in 2007, the shares currently trade at K2.95.

Oil palm estate to expand, double output

AKAMI Oil Palm (AOP) project, an independent estate near Kimbe in West New Britain, will double its production using a K5.3 million loan from the National Development Bank that will finance new plantations.AOP managing director Albert Camillus told The National currently, the company produces a minimum of 240 tonnes annually from a land just less than 200ha.Cammilus said NDB’s assistance would increase its productivity and help it acquire a new block of plantation.Camillus, who came from Nuku in the West Sepik, is now a proud owner of a multi-million kina oil palm project.He is one of the many in the province that supply oil palm fruits to New Britain Palm Oil.Nuku MP and Minister for Housing Andrew Kumbakor, who witnessed the loan presentation, lauded AOP for becoming a medium-sized oil palm entrepreneur.“Oil palm alone has K1 billion in exports earnings and getting serious in such medium-scale project is the way forward to go.“Compared to other agriculture-based export commodities, oil palm is the singles biggest earner and the government should look more seriously into expanding and encouraging locals to get into serious business in the industry.”The other two NDB clients that received loans were KK & Sons from Mt Hagen for a total of K1.6 million for equipment and plant hire, while Madang Bakery received K500,000 for redevelopment.

InterOil reports drop in net profit

INTEROIL has reported a US$1.6 million drop in net profit to US$7.8 million for the second quarter ending June 30, from the US$9.4 million posted during the same period last year.However, the company said its balance sheet and liquidity had remained strong with cash equivalents and cash restricted of US$50.9 million.Its operations – refining and downstream operating segments – derived a net profit for the quarter of US$17.6 million, while the upstream and midstream liquefaction development segments had a net loss of US$8.3 million due to higher exploration expenses.The earnings before interest, taxes, depreciation and amortisation for the quarter was US$14.9 million, compared with US$17.9 million in the same quarter of last year, down US$3 million.Sales and operating revenue increased by US$$76.8 million from US$148.5 million to US$225.3 million.InterOil said the refinery and distribution operating businesses generated earnings of US$24 million before interest, taxes, depreciation and amortisation (EBITDA) during the quarter.This amount offset expenditures from the developing upstream and liquefaction businesses, resulting in a net US$14.9 million in EBITDA on a consolidated basis.Chief executive officer Phil Mulacek said: “We are pleased that our forward momentum has been sustained well into 2010.”“Our delineation drilling results continue to demonstrate the value of our reservoir at Antelope 2, and the finalisation of the joint venture operating agreement with Mitsui & Co is another step in our strategy to monetise our liquid resources at the Elk and Antelope fields.“These accomplishments, combined with our strong balance sheet and the financing we have in place, will enable us to support our continued growth and operational success,” Mulacek said.

InterOil secures further capital of US$25m

PACIFIC LNG Ltd has advanced US$25 million (K67.5 million) to InterOil as additional capital to enable the gas company accelerate its upstream operations.The funding will also allow InterOil to pre-invest with Pacific’s partner Mitsui and, thus, advance the condensate stripping project (CSP).InterOil and Mitsui recently announced a joint venture operating agreement on CSP.Pacific LNG president Henry Aldorf said: “We are pleased to provide additional capital to InterOil in order to accelerate its upstream operations and pre-invest with out partner Mitsui …”Aldorf disclosed that InterOil was drilling its second horizontal well at Antelope-2.He said the well was targeting a higher condensate-to-gas ratio deeper in the reservoir, which can only enhance an already high rate of return project and add resources to the year-end 2009 of 9.1 TCFE (trillion standard cubit feet equivalent).Aldorf said InterOil’s second rig arrived at its refinery in the country and was waiting to be deployed to the field in the fourth quarter following modifications for jungle drilling in this now proven basin.The term loan facility matures in Jan 31 next year and will be used for upstream development and general corporate expenses.InterOil also agreed to pledge Clarion Finanz with a 2.5% interest in the Elk and Antelope fields as collateral.InterOil chief financial officer Collin Vissagio said they were pleased to have obtained this facility which would allow them to maintain financial flexibility while seeking potential industry investors in the two fields.

Airfare war

FLYING between Cairns, Australia and Port Moresby has all of a sudden become very affordable, with the price of a one-way ticket on Air Niugini costing just under K400.The introduction of a QantasLink service from Cairns to Port Moresby last month has sparked a price war between airlines.Air Niugini has launched all-inclusive airfares from A$175 one-way for travel from August to the end of October, making it cheaper to travel to Port Moresby from Cairns than from that city to Brisbane, Sydney and Melbourne.The cheapest airfares to those Australian capital cities yesterday ranged from A$169 from Cairns to Brisbane and up to A$389 to Sydney or Melbourne with Jetstar, the Cairns Post newspaper said.Air Niugini is also offering triple loyalty points until the sale ends on Aug 31.QantasLink, meanwhile, is offering one-way, all-inclusive fares from A$248 and double points to frequent flyers on its direct service.Airlines PNG is offering all-inclusive regular fares from A$200 one-way on the same route.Air Niugini spokesman Colin Lyttle said the “very aggressive” airfare was introduced to compete with QantasLink.“We wanted to remind our customers we operate nine times a week in and out of Cairns,” he said.Lyttle said Air Niugini was considering adding another two services to the Cairns to Port Moresby route.A QantasLink spokeswoman said the airline was “extremely pleased” with passenger numbers on its new direct service.It operated 12 services a week from Cairns to Port Moresby.“We began the service because there is a great demand from mining and resources business people based in Queensland and Cairns,” she said.There are now 23 return services from Cairns to Port Moresby each week.

Indon palm oil firm cleared of charges

JAKARTA: Indonesia’s biggest palm oil producer said yesterday it had been cleared of allegations made by environmental group Greenpeace that it had destroyed high conservation-value forests on Borneo.A report commissioned by SMART, part of the Singapore-listed Sinar Mas agri-business group, found that it was not to blame for widespread destruction of Borneo’s forests as repeatedly alleged by Greenpeace, the company said.“The report concluded that the allegations were largely unfounded and that SMART was not responsible for deforestation of primary forests and the destruction of orangutan habitats,” SMART president Daud Dharsono said.The investigation was carried out by Control Union Certifications and BSI Group.SMART, the Indonesian palm oil unit of its Singapore-listed parent company Golden Agri Resources (GAR) and part of the Sinar Mas agri-industry empire, commissioned the probe in February after the claims were first made by Greenpeace.Greenpeace accuses SMART of widespread forest destruction, including clearing primary forests and peatland.GAR has lost major clients including Unilever, Kraft and Nestle over environmental concerns.SMART’S Dharsono said yesterday: “All the land in the 11 concessions examined comprised of secondary forests, degraded and shrub land and were no longer primary forests before SMART started land clearing and planting.” –AFP

InterOil finalises JV deal with Mitsui

INTEROIL Corp last week announced the finalised joint venture operating agreement (JVOA) for its proposed condensate stripping plant (CSP) with Mitsui & Co Ltd.The JVOA sets out the rights and obligations of the participants to develop a CSP at InterOil’s Elk and Antelope field sites in the Gulf province.It replaces the preliminary joint venture agreement announced last April.This agreement allows InterOil and Mitsui to each have 50% ownership stake, before the government of PNG’s statutory right could acquire up to 22.5% in the CSP.The CSP design is expected to process approximately 400 million standard cubic feet per day (mmscf/day) of well-head gas with an anticipated yield of about 9,000 barrels (bbls) of condensate per day.Located roughly 30km southwest of the fields, the wells and condensate transport from the CSP will be the responsibility of the Elk and Antelope fields owners.

Why Indons replaced M'sia as top palm oil producer?

Commodities Talk - By Hanim Adnan
Malaysian palm oil sector must not lose its focus

INDONESIA’S taking over Malaysia as the world’s largest crude palm oil (CPO) producer in 2006 had often been associated with the mammoth size of the oil palm planted areas.
In fact, many however failed to comprehend that it was the much increased CPO production in the ensuing years – mainly in terms of higher fresh fruit bunches yield and oil extraction rates – that significantly set Indonesia far ahead from Malaysia’s continued stagnanting CPO production.
This year CPO production in Indonesia is targeted to hit 21.5 million tonnes versus Malaysia’s 17.5 million tonnes.
Within five years, the former is also targeted to produce 27 million tonnes annually while Malaysia production is still expected to linger at 17 million to 18 million tonnes.
While the glaring shift in the CPO production epicentre from Malaysia to Indonesia had resulted in changes in the supply equation, some market observers now fear that Malaysian plantation stocks could also stand to lose out on its attractiveness among international investors and fund managers.
Historically, the oil palm plantation sector in Indonesia had been the domain of state-owned companies. However, the early 1990s saw many private companies entering the industry, lured by attractive margins.
Now it is said that 60% of the 7 million ha total planted area is owned by private companies, of which many have been seeking listing on the Stock Exchange of Singapore (SGX) and the Jakarta Stock Exchange (JSX).
More recently, some quarters claim that regional plantation analysts have been putting foreign plantation groups like Indofood Agri and Wilmar International on their radar instead of the lacklustre rating given to Malaysian planters, which also have sizeable plantations in Indonesia.
Some say the shift to foreign-listed plantation groups, particulary Indonesia, could be due to its status as the world number one CPO producer and gradually being recognised as the future CPO price benchmark setter instead of Malaysia.
In fact, the Indonesian authorities had been busy setting up new CPO contracts to rival that of Malaysia’s Bursa Derivatives Exchange CPO futures (FCPO).
The FCPO is currently the world price benchmark for CPO.
In July last year, Indonesia launched its own CPO physical contract under the Jakarta Futures Exchange (JFE) and last April, a CPO futures contract was launched via the Indonesia Commodity and Derivatives Exchange (ICDX).
While these two Indonesian CPO contracts may still have yet to generate significant liquidity in their markets, there is a looming threat to Malaysia’s FCPO given the participation of many big names in the Indonesian oil palm industry in ICDX and JFE.
Therefore, with the multi-challenges faced by the local oil palm sector, it is pertinent to keep the momentum in terms of improving the stagnanting CPO production, focusing on aggressive replanting with higher-yielding clones, promoting more downstream industries and continuous roadshows among listed plantation companies to generate interest among international fund managers.
While Malaysia may no longer reign as the world’s number one CPO producer, it must try its best not to lose out on its current spot as the world’s largest exporter of palm oil products.
Deputy news editor Hanim Adnan believes that issues pertaining to oil palm production can be handled amicably should the Goverment enforce stricter replanting rules while the private sector must not be hesitant to undertake replanting despite the current attractive CPO price.

PM urges ANZ to invest in micro-lending,banking

By PATRICK TALU
PRIME Minister Sir Michael Somare has urged the Australia & New Zealand Bank Group to create a micro-financing and banking scheme in Papua New Guinea to help the rural people.Sir Michael pointed out that this was the best way to protect and grow their savings.In his keynote address at a gala night last Friday to celebrate the 100th year of ANZ banking services in the country, he said: “I would like to encourage you to look at micro-financing and micro-banking so that you can extend your services by catering for developments taking place all around the country.”Sir Michael said this year the economy was anticipated to grow by about 8.5%, of which 3% would be attributed to construction activities at the liquefied natural gas project.He said all this prosperity was relevant to investors like ANZ Bank which is already one of the more profitable banks in PNG.“You have had a 100 years of experience in the country. “The people of PNG have supported the ANZ Bank all these years and will continue to do so as long as you are here.“I encourage ANZ to help rural people to protect and grow their savings.“I know that your investment will be invaluable to the communities … it will be challenging for you but I believe it will be worth it when you look back a few years from today,” Sir Michael said. The Prime Minister said with the combined experience of ANZ’s top management team in the Asia Pacific region, it can tap into that knowledge to extend services across the country.“With the technology that is available today, I am sure ANZ can provide innovative options to all its existing and potential customers.“Now, more than ever, is the time to reach out to the “unbanked” population of PNG and the Pacific,” Sir Micahel said.

K25 million Chinese grant for Ramu road

By PATRICK TALU
THE Chinese government yesterday announced a K25 million grant for the construction of a 20km public road in the vicinity of the Ramu nickel project in Madang.The fund was made available at the request of the Ramu nickel and cobalt project developer Ramu NiCo. Ramu NiCo president Luo Shu told a Port Moresby media conference that the road would be built from the Usino junction to Yamagi in the Ramu project’s Kurumbukari mining area.“I am proud to announce the additional commitment Ramu NiCo has negotiated from the Chinese government for the benefit of the people of the project area,” Luo said.“This grant is an indication of China’s commitment to the project and to PNG and is welcomed by the project owners. “We look forward to working in close cooperation with all Madang citizens in promoting the sustainable development of this province’s significant natural wealth.“We want to ensure that the people enjoy the benefits brought about by the project.”Luo said China viewed Papua New Guinea as a place of opportunity and its commitment to invest remained paramount.She expects construction to start as soon the government signed the necessary papers.The road is catered for in the current memorandum of agreement Ramu NiCo signed with the national and provincial governments and the resource owners and the project developer.

Polye to contest PM’s post

By ISAAC NICHOLAS
ACTING Prime Minister Don Polye has made known his intentions to contest the prime minister’s post.Polye said he would make public his candidacy at the National Alliance party convention in the Jiwaka region next month.He told reporters that there must be a strike of balance between all the other regions of the country, with Paias Wingti being the only prime minister from the region.“Now is the time to give a chance to the highlands region,” Polye said.He was speaking after announcing the ministerial portfolios of the new ministers last Thursday.“With the new ministries, I do not think the Somare-Polye government will fall.“The opposition cannot go and oust a government when you do not have a notice in parliament,” Polye said.He said the opposition was trying to mislead the public and create instability within government.The new cabinet ministers and their portfolios are Lucas Dekena (Lands), Francis Potape (Climate Change), Moses Maladina (Trade), Benjamin Poponawa ( Civil Aviation and Immigration), John Pundari (Mining), Timothy Bonga (Forest), Guma Wau (Culture and Tourism) and Fidelis Semoso (Bougainville Affairs).The climate change, trade and immigration are new ministries.“I ask the people of PNG, the public and private sectors to accord the new ministers their full support and cooperation.”Polye said the new team would be the backbone of the new-look Somare-Polye government, stressing that the team would not be moved in any political horse trading.He said the aim of the new group was to go into cabinet to discuss and review some of the controversial and much debated issues such as the amendments to the Ombudsman Commission Act.He said other bills brought before parliament would also be reviewed by the new leaders.“Nation building is not only to do with individuals with picks and shovels, plants and equipment or saws and hammers,’’ Polye said. “It is more so with the building of the culture in the mind and heart of hard work, strive, thrifty, industrious, honesty and justice in Papua New Guineans, children, women and men.“A society of high standard in values and principles is what we must build,” Polye said.Trade Minister Moses Maladina said the Ombudsman Commission Bill was introduced as a private member’s bill and he would also bring that up in cabinet for further disussion.

8 new faces join cabinet

PRIME Minister Sir Michael Somare has rewarded the highlands region with five new faces in cabinet for helping him fight off a spirited bid to remove him from office.The prime minister ended a tumultuous week by appointing eight new ministers to an expanded cabinet, and promoting National Alliance party highlands region leader Don Polye to deputy prime minister.In a week of uncertainty which saw Deputy Prime Minister Puka Temu and Minister Belden Namah (Forest) and Charles Abel (Tourism) walk out to join forces with the opposition to topple the prime minister, all eyes were on Polye and his group.The highlands bloc held the key to the government’s survival, and were talking to the opposition while negotiating with Somare.When the notice of a motion of no-confidence was lodged with the speaker yesterday morning, they decided to remain with the prime minister.They were rewarded with the appointment of Polye as deputy prime minister and Benjamin Poponawa (Tambul-Nebilyer, NA), Lucas Dekena (Gumine, NA), Guma Wau (Kerowagi, URP), John Pundari (Kompiam-Ambum, PP) and Francis Potape (Komo-Margarima, URP) were made ministers.The other new ministers were Timothy Bonga (Nawaeb, NA), Moses Maladina (Esa’ala, RDP) and Fidelis Semoso (Bougainville, NA).Bonga takes the forestry portfolio vacated by Namah, Wau replaced Abel and Semoso is Minister for Bougainville Affairs.The portfolio of the other five ministers will be made known today.The prime minister said he would work on the determinations for the new ministries being created, and then announced them before he leaves for Fiji today for a regional leaders’ meeting.He said this was only a precursor to a major cabinet reshuffle to be announced in two weeks time.He described the new ministers appointed as well credentialed men who were well versed in politics.Sir Michael said the additional ministries would come out from the more-than-one portfolios looked after by individual MPs such as mining, lands, physical planning and civil aviation.Polye will be acting prime minister when Sir Michael leaves for Fiji.

Crowne Plaza boss wins top award

By GEEJAY MILLI
Picture:

THE much-coveted award from the Intercontinental Hotels Group for this year went to Crowne Plaza Port Moresby’s general manager Tim Pollock.The awards event was hosted in Singapore last week.The award has been considered an achievement not only for the Crowne Plaza but also for Papua New Guinea because the recognition covers countries in the Asia-Australasia region.Other participating nations included countries in Asia, the Pacific and Australia and New Zealand.The award had drawn attention to the vast potential that PNG has as a country in what it has to offer.The general manager’s award of the year looks at categories of financial management of the hotel, guest experience, how well the hotel does as a responsible business and community relations.Pollock received a surprise welcome back from the hotel personnel who expressed pride over his feat.“I am very honoured to have won the award I am privileged to be the GM of this hotel but I am just part of the achievement,” Pollock said.“It is the people who are a big part of this, and I would encourage the staff to keep up the great effort,” he continued.Pollock, who previously lived in PNG, is in his third year as Crowne Plaza general manager.

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.

NGE spuds first exploration well

NEW Guinea Energy (NGE) spudded its first exploration well at Panakawa oil prospecting licence in Gulf province last June 25, according to a statement to the Australian Stock Exchange yesterday.The drilling programme is managed by contractor Australian Drilling Services, using its contracted rig #6.Work has been progressing well for the last 10 daysThe Panakawa oil prospect is located in PPL 267.It was initially identified as a lead from the Yalis phase I seismic survey completed in 2006, and further delineated by the Yalis phase II seismic survey (Q3 2008).The prospect underlies the Panakawa oil seep which has a surface measured flow rate of five barrels of oil per day of 35°API oil and is ideally located less than 1km from Rimbunan Hijau’s Panakawa logging and veneer plant wharf.The statement said the Panakawa-1 well was targeting the lower cretaceous toro formation sandstone and several secondary reservoirs.Proposed total depth of the well is 2,323m in basement.The company expects the well to require approximately 30 days drilling.NGE is the sole owner of PPL 276.The company said apart from PPL 276, NGE also has five other onshore petroleum prospecting licences (PPLs) covering more than 52,000sqkm (including PPL 276).These PPLs contain an excellent exploration inventory of 59 prospects and leads, which include six drillable prospects.Ten top leads are currently being evaluated for upgrading to drillable prospect status.The oil-and-gas-focused explorer raised US$18.5 million (K49 million) early this year by a placement of 112,121,210 shares at US$0.165 per share to sophisticated or professional investors, it said.The fundraising was managed by Bell Potter Securities Ltd and was strongly supported by both institutional and sophisticated retail investors.The shares issued will rank equally with existing ordinary fully-paid shares on issue, with shareholders approving the matter at a meeting last week.NGE is partly-owned by Sir Michael Bromely, a PNG-based businessman who, at one time, ran one of the Highlands’ region’s large supermarket chains – the Bromley and Manton.

Petromin, Mitsui in joint project

PETROMIN PNG Holdings Ltd signed an agreement last Friday in Port Moresby with Mitsui & Co Ltd, Japan’s major trading company, to jointly undertake feasibility studies to identify and to set up new gas-resource based businesses.In a joint statement, Petromin managing director and chief executive Joshua Kalinoe and Shintaro Ambe, managing officer of Mitsui’s infrastructure projects business unit that their companies want to see downstream businesses established to create long-term job opportunities for Papua New Guineans.

LNG cargoes big challenge to ports

THE increasing volume of shipment destined for the liquefied natural gas project (LNG) is now causing big stress on the country’s major ports, but wharf operators are gearing up to handle it.“The impact is already here,” PNG Port Corp chairman Dr Ila Temu said during an interview at the Yacht Club last Thursday, where a shareholders’ “get to know” night was held.“Our big challenge is how prepared are we to support the economy … PNGPC is a stakeholder responsible for providing efficient port services in the country in light of commodity booms,” Temu said.“The heavy equipment and machineries destined for the LNG project have already put a massive strain on our port facilities.“Nevertheless, PNG PC has positioned itself to take up the challenge.“We are determined to handle that,” Temu told The National. PNGPC is restrategising itself to meet the demand by improving its port facilities, especially the Port Moresby and Lae ports.“Already, at least K40 million has been approved for two hub ports of Lae and Port Moresby to boost capabilities to handle the growing volume of cargoes being unloaded at the two wharves,” Temu said.“The volumes of containers with heavy machineries coming into Lae and Port Moresby ports were really huge and are putting stress on our facilities … but we are determined to face the challenge.“We already have scanning machines in place and Lae port is under expansion also,” Temu said.PNGPC is the former PNG Harbours Board which was privatised to operate as the government’s unit for port operations.

Petromin inks deal on LNG devt tech

PETROMIN PNG Holdings Ltd entered into a co-operative development agreement (CDA) yesterday with two international partners.This agreement is to investigate the prospects of introducing liquefied natural gas (LNG) floating production storage and offloading (FPSO) technology to PNG.The partners are DSME E&R (ENR), a subsidiary of Daewoo Shipbuilding and Marine Engineering (DSME) of South Korea, and Höegh LNG of Norway (HLNG).Both companies have worked on the shipping and processing components of the LNG FPSO technology respectively, and the technology is ready for immediate implementation.In a joint statement, Petromin managing director Joshua Kalinoe, DSME E&R chief executive officer Jin Seok Kim, and Höegh LNG board director Andrew Jamieson, said the CDA provided for a tripartite partnership among the companies to carry out a joint study to determine the technical and economic viability of developing the gas reserves of Papua New Guinea using LNG FPSO technology.“We have agreed to work together by entering into a co-operative development agreement signed today, to introduce the technology to Papua New Guinea.”

Petromin for offshore gas processing plant

By BOSORINA ROBBY
PETROMIN PNG Holdings Ltd yesterday presented to its major stakeholders the concept of having an offshore processing plant designed to greatly reduce the time and money spent on onshore pipeline laying and other concerns.Managing director Joshua Kalinoe said the liquefied natural gas (LNG) floating production storage and offloading (FPSO) exercise would be the fastest means of commercialising the gas resources in PNG, especially for gas fields within the ocean’s proximity, with long-distance pipeline options to the onshore processing facilities.He said from the co-operative development agreement signed by Petromin and its international partners DSME South Korea and Hoegh LNG Norway on Tuesday, economic and technical feasibility studies would continue to provide a competitive option to gas owners in the Gulf of Papua, including the ELK/Antelope LNG project.Kalinoe said this would provide an alternative to gas owners and operators in the country to save time and money by having an offshore processing facility nearby, rather than through hundreds of kilometers of pipelines.The LNG FPSO technology will feature an offshore facility vessel that will be built by DSME, and will be able to store, process and prepare gas for export.The processing facility is projected to be capable of producing up to three million tonnes of LNG annually.Kalinoe said if everything went according to plan, the final investment decision should be made by Dec 31 to allow for the construction of the vessel to begin by next February and first cargo anticipated for late 2014.He said the technology also had the advantage of early monetisation of gas reserves when compared to conventional onshore LNG facilities and the training of many Papua New Guineans.He said the partnership with DMSE and Hoegh LNG would allow Petromin to fulfil its mandate as the national oil, gas and minerals company to join and deliver the first LNG FPSO facility in PNG.

Construction at gas project in full swing: Esso H’lands

By PATRICK TALU
THE multi-billion liquefied natural gas (LNG) project moved into full execution phase last March and is currently at the earliest stages of the four-year construction period.The environmental and social verification and monitoring systems and reporting protocols are also at an early stage of implementation.According to an executive summary statement from Esso Highlands Ltd managing director Peter Graham yesterday, much of the project activity would occur under six engineering, procurement and construction (EPC) contracts being executed by some of the industry’s leading contractors.Graham said to date only one of the EPC contractors for the Komo airfield had commenced field construction activity, while the other EPC contractors remain in the execution planning phase.Additional to the EPC contracts, construction contracts were awarded last year for a programme of infrastructure upgrades in advance of the main construction activities in the Gulf and Southern Highlands provinces.Graham said the upstream infrastructure element of this programme incorporates civil works in the areas of Hides and Kutubu, upgrade and construction of new roads and bridges, construction of training facilities and camp construction, extension and refurbishment.Another contract covers early works at the LNG plant site and nearby area.Contracting is in advanced stages for two newly-built drilling rigs to drill and complete the project wells.Graham stressed that the recruitment and development of qualified Papua New Guinean citizens is a key component of the “project’s national content plan (NCP)”.“The strategy is to maximise the number of local employment opportunities, to in-crease the ratio of national employees over the life span of the project and to train them in the technical and professional skills necessary for working on existing, and future, projects and operations.”

Popoitai: Liquidity from gas project a problem

By SHEILA LASIBORI
THE PNG liquefied natural gas (LNG) project will continue to inject liquidity into the banking system over the construction phase.And the presence of increased liquidity is a major concern for the Bank of PNG (BPNG) that must act to diffuse it, according to Deputy BPNG Governor Benny Popoitai.BPNG uses the treasury bills (TB) to reduce or remove liquidity in the banking system.Popoitai said a wealth fund was appropriate to assist in keeping the liquidity level within the banking system at a lower rate.“Our current liquidity situation to date is that we have gone well over K700 billion in liquid assets in the banking system.“Our exchange settlement accounts has also gone over K500 million.“The basic indicator of the liquidity situation of the banks is that when the exchange settlement accounts of the banks with Central Bank increases, it indicates that they increased with liquidity.“That is a situation that we have to give a serious thought in dealing with the liquidity level,” Popoitai said yesterday in Port Moresby during the international and domestic stakeholders’ workshop on the possibility of setting up a wealth fund.“Much of that liquidity is injected from the construction of the LNG project as well as drawdown of the trust accounts from the BPNG,” he added.

OTML, Frontier ink deal on exploration project

OK Tedi Mining Ltd (OTML) has signed a deal putting up exploration farm under a joint venture set up.This will be with wholly-owned subsidiaries of Frontier Resources Ltd (Frontier Resources).The first joint venture (JV) relates to two exploration licences (ELs) for Bulago (EL 1595) and Leonard Schultz (EL 1597)) held by Frontier Gold PNG Ltd (Frontier Gold).The second JV relates to Likuruanga in West New Britain (EL 1351) and two EL Application (ELA) areas (Central New Britain (ELA 1593) and East New Britain (ELA 1592).Each of these tenements is held by Frontier Copper PNG Ltd (Frontier Copper).In a statement on its website, OTML said it was committed to exploration expenditure of US$2.5 million (K7 million) and an additional US$1 million (K3mil) share placement in Frontier Resources.

Investors should buy now, says BSP

BANK South Pacific (BSP) Capital Ltd is recommending that current investors and aspiring ones buy shares now to be able to enjoy a high return in the next two years.This is because during this period, the returns on shares will be up by 51.3% at an estimated selling price of K0.96 per share.The current share price is K0.66.BSP Capital analysts, in releasing the forecasts yesterday, said the number one return would be on Port Moresby Stock Exchange (POMSoX) listed companies.The key points behind the “strong buy” recommendation are: A total dividend of K4 was declared where K2.20 is payable in July this year and a further K1.80 at a later date.“We expected the dividend payout ratio to increase by 50%,” BSP Capital said.The two-year good return on share forecast will be realised because of a successful debt and equity investment in BSP by the International Finance Corp (IFC), which is expected to provide new capital to expand the local book. Another reason was that an anti-fraud technology was introduced to stamp out misrepresentation and deception.BSP said an internal unit was transforming its old systems, processes and procedures to align with “world best practice” and that the electronic banking facilities would continue to expand this year.“There will be 280 installed automatic teller machines (ATM) and the general packet radio service (GPRS) electronic funds transfer at point of sale (eftpos) devices will grow markedly while short message service (SMS) banking will further its growth,” the bank said.

Apec urged to push for free trade in region

ASIA-Pacific Economic Co-operation (Apec) leaders should recommit to achieving free and open trade within the Apec region.They should also agree that a free trade area of the Asia-Pacific (FTAAP) is an inspirational but achievable vehicle for free and open trade and investment within the region.These were part of the five recommendations by Apec business advisory council (Abac) for the Apec trade ministers who meet later this week.In recommitting to achieve free and open trade within region, Apec said they should take into account the fundamental changes in Apec’s economic and social structures over the last 16 years, and the fact that we are now in the era of the post-industrialised knowledge-based economy.“Abac recommends that a new vision is needed, building on the Bogor goals to reflect the changing nature of modern Asia Pacific regional supply chains and value chains,” it said.

Esso releases first quarter environmental, social report

ESSO Highlands Ltd, operator of the PNG liquefied natural gas, has released its first quarter environmental and social report.The report details actions to develop the energy project in a responsible manner while bringing economic success to PNG and providing energy to meet Asia’s growing demand, the company said in a statement.Esso Highlands is a subsidiary of ExxonMobil Corp.It said the report detailed how PNG LNG was implementing commitments made in the project’s environmental and social management plan, which is based on the most comprehensive environmental impact assessment ever undertaken in the country.The report covering January to March this year also demonstrated how the project was contributing to the economic growth of the country through development of a local workforce and suppliers.Peter Graham, managing director of Esso Highlands, said: “Completion of the financing arrangements last March moved the project into a full execution phase.“We are developing this challenging project in a manner that reflects our high standards in business and operational integrity, and importantly in safety, security, health, environmental and social management.“The benefits that flow from the project will support the PNG government’s objective to strengthen its economy and infrastructure base for the benefit of its people.“This is the first in a series of reports that details our progress in this challenging project.”The project is currently at an early stage of a four-year construction period, with activities under way in design, pre-mobilisation and early site works.

New joint venture eyes LNG projects

THE Massco PNG Ltd (Masco) and CoDa PNG Ltd and Associates (CoDA) have formed a joint venture company to engage in structural and engineering designs, eyeing massive projects to roll out from the on-going liquefied natural gas (LNG) development in the country.Massco and CoDA , a South Korean-owned entity, signed the partnership agreement yesterday, in which Masco will have 51% interest while CoDa, 49%The deal was signed by Massco executive chairman Jerome Kairi and CoDA chief executive Joshua Chi, witnessed by managing director Caleb Insun Kim and representatives from both parties.Hailing the signing, Kairi said: “It is a milestone achievement for a landowner company from Gobe petroleum development licence (PDL) 4 in Southern Highlands to join hands with a reputable company from sophisticated country like south Korea.”“It signifies great improvement from the way we have come so far in reaching this agreement.“Now, we want to tell Esso Higlands Ltd that we have the necessary equipment, financial capacity and technical expertise that are readily available to take up bigger task at the top level.“It’s now up to EHL to give us the scope of work for the contracts for EPC as we have met all the requirements,” Kairi said.He said the concept met the national content plan that stipulates landowner companies to participate in the LNG project.When asked what areas the joint venture company was targeting at, he said the new company was targeting projects at EPC2, EPC3, EPC5 A and EC2.Kim said the agreement was a “marriage between CoDA and Massco” and had assured they would live through both in bad and good times”.“We must work together, having in mind that in the future the JV company can be a major project developer like EHL if we work with passion and the philosophy to move forward.”The partnership is backed by LABA Holdings from portion 152, Gobe Field Engineering, the umbrella company for Gobe PDL 4, and Kikori Oil Investment Ltd.Each company owns 10% equity.

Kaukau ‘woes’ traced

By SENIORL ANZU
THE loss of value in marketable sweet potato or kaukau happens at all points of the supply chain from farms in the Highlands to markets in Lae and Port Moresby, according to a survey by NARI and the Fresh Produce Development Agency (FPDA).A stakeholder workshop on “Towards better kaukau supply chain in PNG”, which started at NARI headquarters in Lae on Wednesday was told that such losses happen due to poor handling during transport.Survey participant, Ronald Pam from FPDA, told stakeholders that some of the obvious damage was skinning, broken root and rotten tubers.“Lots of damage occurs at loading and unloading … major impacts lead to lots of broken root.“This results in lots of rotten tubers that can not be sold (soft rot) at the markets,” Pam said.He said such damage reduce the value of kaukau when they appear at the market place.The survey identified that causes include rough handling, different packaging methods, and transportation-related problems derived from handling and high humidity.Pam said damage starts on-farm from rough handling and this snowballed further down the chain.He said the number of broken roots increased through transportation – due to loading and unloading.Professor Barbara Chambers of the University of Canberra, who facilitated the two day workshop, said the event was to sensitise discussions on the supply chain of kaukau, with reference to value adding and post-harvest of kaukau.The workshop discussed how producers could take advantage of recent researches on kaukau disease control and post-harvest handling.

Crowne Plaza boss wins top award

By GEEJAY MILLI
THE much-coveted award from the Intercontinental Hotels Group for this year went to Crowne Plaza Port Moresby’s general manager Tim Pollock.The awards event was hosted in Singapore last week.The award has been considered an achievement not only for the Crowne Plaza but also for Papua New Guinea because the recognition covers countries in the Asia-Australasia region.Other participating nations included countries in Asia, the Pacific and Australia and New Zealand.The award had drawn attention to the vast potential that PNG has as a country in what it has to offer.The general manager’s award of the year looks at categories of financial management of the hotel, guest experience, how well the hotel does as a responsible business and community relations.Pollock received a surprise welcome back from the hotel personnel who expressed pride over his feat.“I am very honoured to have won the award I am privileged to be the GM of this hotel but I am just part of the achievement,” Pollock said.“It is the people who are a big part of this, and I would encourage the staff to keep up the great effort,” he continued.Pollock, who previously lived in PNG, is in his third year as Crowne Plaza general manager.

Home models prove a big hit

By KESSIE TADAP
THE PNG Forest Products’ recently-launched housing models of Niu Homes (NH) have drawn wide interest from prospective homebuyers nationwide.The series of home design-models were advertised in the newspapers.Marketing manager Fred Alblanaida, when contacted by The National yesterday, said due to the large number enquiries from the public, the company would not be able to reply to individual queries.However, Alblanaida said the company was drafting a standard reply which would be distributed through public channels.This way, the company hopes to answer public queries to their new range of home models.Although the company is not new to building and providing pre-fabricated homes for the PNG homebuyers, Alblanaida said the NH range was the company’s new model type of houses which had been specifically designed to give the people quality and affordable housing, which was “perfect for modern tropical lifestyle”.Asked about the target market, he said: “The company’s new home models are catered for people who could afford to buy them.”“From executive to village design settings, the buildings are 100% PNG made,” Alblanaida said.The buildings are termite-resistant as all timber components have been treated to meet Autralian standards, using 100 % sustainable and renewable pine wood.

Kikori landmen bond to pursue LNG projects

MORE than 30 Kikori pipeline landowners have come together to form the only two umbrella companies that would do business with the liquefied natural gas (LNG) project developers and owners.After long years of infighting and business conflict, the 30 landowners have united to form the Kikori Oil Investment and Greenfield Resources Investment as their duly- recognised umbrella companies.In a press conference, the landowners said their coming together had met the developer and the government’s requirements, aimed at speeding up the distribution of spin-off benefits from the gas project.The landowners said their companies were the only recognised companies as far as their people were concerned, adding that individual landowner company business proposals would be withdrawn.Kikori oil pipeline landowner association chairman Bomsy Boviro said they had taken a strong resolve to come together as one and that it was about time the state release their business grants while the developer should now give them projects.Greefield Investments managing director Timothy Irinaya said the issue as to which landowner group should be the main landowner company had been resolved and that they were ready to liaise with the company and the developer for whatever benefits they could get.He reiterated that the government should release the business development grants so the companies could start their business activities.West Kikori LLG president Wilson Baidu said the government would recognise no other groups but the two newly-formed companies.He thanked the parties for coming together for the sake of the people.

6,000 jobs at new tuna plant in Lae

THERE will be at least 6,000 jobs on offer to Papua New Guineans in Morobe province, thanks to the US$80 million (K226.6 million) integrated fish processing plant to be set up here. First phase will cost US$30 million (K85 million) which has a processing capacity of 130mt per day.The national government through the National Fisheries Authority (NFA), together with Morobe provincial government, signed the project agreement with Asia’s Majestic Seafoods Ltd.The 350mt per day tuna processing plant is to be constructed within the Malahang Industrial Centre in Lae.Majestic Seafoods Ltd is a company put up by three major companies composed of Frabelle Fishing Corp (Philippines) operating in PNG as Frabelle (PNG) Ltd; Philippine-based Century Canning Corp; and Thailand-based Thai Union Corp, a subsidiary of Thai Union Frozen Products PCL (TUF).According to company representatives Chris Po, president of Pacific Century Group; Narin Niruttinanon, deputy general manager Thai Union; and Frabelle president Engr Augusto Natividad, they would be bringing into the country and especially in Lae the technical know-how.And in return, they asked for support from the people especially those that will be employed, and the provincial and national governments.But the main ingredient that won the big names in Asia’s fishing industry over to PNG was the raw material tuna in PNG waters, which is part of the Western Central Pacific Ocean (WCPO).Natividad said PNG was rich in tuna and through NFA it had a well-managed fishery in the world.“We will be fishing within that allowable quarter to make sure that fishery will remain sustainable … it is the kind of resource that you can pass on for as long as we fish within that limit,” Natividad, who is also the director for Majestic Seafoods Ltd, said.He also stressed the importance of the cost of production at the plant.“That while we have the raw material here, we still have to compete with all other canneries all over the world. The market is the world.”Natividad said the competition would come from tuna producing countries which included Thailand, Philippines, Ecuador, and Spain among others.“So to make sure that we will have a cost that will be competitive, we need the support of everyone, especially the people who will work with us once the factory is in place.“We have to work together to make this cost competitive,” he said.Natividad commended NFA for having a very good food safety chain in place that was according to world standards, including the European Union (EU).NFA managing director Sylvester Pokajam said the project was a foreign direct investment.He said with Thai Union coming to PNG, a lot of things would change for the better since it (Thai Union) had changed Bangkok to be tuna centre in the world.Niruttinanon said: “While we see the potential for PNG to become next tuna centre in the world, it must be stressed that the key success factor is actually the PNG people.”

Kapris: Policy of govt to see how best to process natural resources

COMMERCE and Industry minister Gabriel Kapris says the policy of the national government is to see how best they can do downstream processing of PNG’s natural resources.And these natural resources includes fish where the government tries its best to find foreign investors who are willing to invest in the country and at the same time agree to carry out downstream processing.“That is promoting government’s policy on downstream processing and creating jobs.“Business is something that is not planted in PNG,” he said during the signing of the project agreement for PNG’s biggest fish project to be staged in Lae, Morobe province.“Spin off business is my concern … I would like you to give specific attention to Papua New Guineas … to see that people on the ground benefit from this project,” he told the gathering including representatives of the three companies heading the US$80 million project (K226 million).Majestic Seafoods Ltd will be the company to develop the project.It was established by Frabelle Fishing Corp. (Philippines) operating in PNG as Frabelle (PNG) Ltd, Philippine-based Century Canning Corp and Thailand-based Thai Union Corp., a subsidiary of Thai Union Frozen Products PCL (TUF).

EU MPs positive on oil palm

KUALA LUMPUR: The European Union (EU) members of parliament (MPs) are impressed with the oil palm industry’s contribution towards creating wealth and economic growth for Malaysia.
Danish MP Dan Jorgensen, who is vice-chairman of the Environment Committee and member of the Group of Progressive Alliance of Socialists and Democrats in the European Parliament said: “As a whole, I think, it has helped take people out of poverty, which is a very positive thing.”
“The challenge now is the sustainability of the commodity. Even though progress has been made, there is still possibility of becoming better in this area,” he said after a stakeholder roundtable discussion on issues related to biodiversity and the sustainability of Malaysian palm oil here last Friday.
Jorgensen was on a week-long visit to Malaysia together with two other EU MPs – Martin J. Callanan (Committee on the Environment, Public Health and Food Safety) and Ole K. Christensen (Member of the ACP-EU Committee).
Jorgensen said the next decade would continue to see an increase in the focus on sustainability as a competition criteria on the global stage, whether for fuel, food or other commodities.
Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty
“From the sustainability point of view, palm oil has great potential compared with other oils,” he added.
Many have voiced concern over the new sustainability criteria in the EU Renewable Energy Directive, due to come into force from Dec 5, and its impact on palm oil-exporting countries like Malaysia.
On that matter, Jorgensen expressed the willingness of MPs to assist Malaysia in ensuring there was no discrimination against the country’s palm oil export to the region.
“First, we do not want any discrimination at all of the palm oil sector. We have promised our friends in the industry here to help them in discussions that we have in the EU on different criterias.
“If there has been any discrimination, we will do everthing possible to change it.
“Second, we are at the same time very committed to the sustainability criteria,” he said.
The sustainability criteria is related to two issues – the lifecycle greenhouse gas emissions of biofuels and the land used to produce the biofuels.
Christensen noted that in western Europe, there was perception that palm oil is a bad thing because rainforests are being destroyed to make way for plantations.
“That’s what many people believe. So, we are gratified to get assurances here that Malaysia has strict laws to ensure no more forests are destroyed,” he said.
He also said it was a challenge to get this point of view across to the Western audience. — Bernama

Shortage of oil palm seedlings

By JACK WONG jackwong@thestar.com.my
Demand set to rise as Sarawak steps up development of oil palm plantations
KUCHING: Sarawak, which is facing a shortage of oil palm seedlings, is expected to see rising demand as the state has yet to develop a quarter of its target of one million hectares of oil palm plantations, said State Assistant Minister in the Chief Minister’s Department Naroden Majais.
He told an oil palm seedling entrepreneurship course here recently that Sarawak needed 16.4 million seedlings last year but the supply only amounted to 10 million.
Juara Beetuah Sdn Bhd managing director Michael James attributed the shortage in Sarawak, especially over the past two years, mainly to exports of oil palm seedlings to Kalimantan, Indonesia.
He said such sales had however abated as the Indonesian plantations, most of which were owned by Malaysian firms, had started their own nurseries.
Juara Beetuah, a major seedling producer and the only company in Sarawak awarded the competency certificate by Malaysian Palm Oil Board (MPOB), owns nurseries in Lundu (Kuching Division), Bintulu and Lawas in northern Sarawak.
Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty
James said his company produced up to 100,000 seedlings a year, which were mainly supplied to MPOB. The latter then distributes them to smallholders.
Juara Beetuah’s other customers are government agencies like Sarawak Land Consolidation and Rehabilitation Authority and Felda, which are involved in plantation projects.
“We produce based on advance contracts. On top of that, we produce another 10% for the market,” he told StarBiz.
Juara Beetuah uses high-yield clones that are able to produce between 28 and 33 tonnes of fresh fruit bunches per hectare a year.
However, James said the output would depend on several factors such as soil conditions and plantation management methods.
The company sells seedlings for RM8 to RM12 each, depending on transportation costs.

Popoitai: Liquidity from gas project a problem

Source:
By SHEILA LASIBORI
THE PNG liquefied natural gas (LNG) project will continue to inject liquidity into the banking system over the construction phase.And the presence of increased liquidity is a major concern for the Bank of PNG (BPNG) that must act to diffuse it, according to Deputy BPNG Governor Benny Popoitai.BPNG uses the treasury bills (TB) to reduce or remove liquidity in the banking system.Popoitai said a wealth fund was appropriate to assist in keeping the liquidity level within the banking system at a lower rate.“Our current liquidity situation to date is that we have gone well over K700 billion in liquid assets in the banking system.“Our exchange settlement accounts has also gone over K500 million.“The basic indicator of the liquidity situation of the banks is that when the exchange settlement accounts of the banks with Central Bank increases, it indicates that they increased with liquidity.“That is a situation that we have to give a serious thought in dealing with the liquidity level,” Popoitai said yesterday in Port Moresby during the international and domestic stakeholders’ workshop on the possibility of setting up a wealth fund.“Much of that liquidity is injected from the construction of the LNG project as well as drawdown of the trust accounts from the BPNG,” he added.

New push to conserve tuna stocks

Source:
By SHEILA LASIBORI
EIGHT Pacific Island countries, including PNG, are enforcing five new measures to conserve tuna in the Western Central Pacific Ocean (WCPO).The five new measures are:1) Reducing US treaty effort;2) Closing the rest of the high seas between 10 nautical miles and 20 nautical miles south to purse seine fishing;3) Extending the fish aggregating devise (FAD) closer to five or six months;4) Extending FAD closure on foreign fishing vessels only (or maybe a complete ban on use of beacons by foreign vessels; and5) Extending the FAD closure for purse seine fleets of commission (Western Central Pacific Fisheries Commission) member countries whose long line fleets take more than 4,000 tonnes annually in the high seas.National Fisheries Authority managing director Sylvester Pokajam made the disclosure while commenting on the status of tuna stock in the WCPO.The eight countries are: Palau, Federated States of Micronesia (FSM), PNG, Solomon Islands, Nauru, Kiribati, Tuvalu and the Marshall Islands.The countries drew up the additional measures prior to the fisheries ministers meeting in April this year during the Pacific Fisheries Agency (PFA) officials and ministers meeting in Solomon Islands.

Private sector urged to invest

THE private sector has been encouraged to consider investing in agriculture and manufacturing sectors to take advantage of the opportunities provided by the PNG liquefied natural gas (LNG) project which is essential for broad-based employment and income-earning opportunities.But the government must fully play its part by ensuring that roads, airstrips, ports, education and training utilities are operational and other investment conditions in place including a level playing field for competition, addressing law and order and corruption issues which hinder progress, according to the Business Council of PNG (BCPNG).“A stable exchange rate and low interest rates are needed for continued investment and a well managed and transparent sovereign wealth fund would be needed to restrain inflation and excessive currency appreciation, thus enabling other key industries such as agriculture, tourism and manufacturing to become viable once LNG revenue starts flowing,” Gerea Aopi, vice-president for BCPNG said.This was part of his closing remarks at the closing of the 26th Australia PNG business forum and trade expo in Townville, Australia this week.Aopi said the funding for the LNG project was secured in a tough financial market, and signalled the market and investor confidence in the project partners, led by ExxonMobil.“It also is a vote of confidence in PNG as an investment destination.

NBPO posts US$4.3mil profit drop

By YEHIURA HRIEHWAZI in Brisbane
NEW Britain Palm Oil (NBPO) recorded a drop in profit of US$4.3 million (K12.11 million) in the first quarter of this year, forced mainly by bad weather affecting fruits, road conditions and haulage.The company also announced that it will start operating its Liverpool refinery in England “within next month” and its chief finance director of 18 years David Dann will also leave the company in August.The announcements were made in Singapore as NBPO unveiled a profit of US$23.3 million (K3 million) for the three months to March 31, down from US$27.6 million (K78 million) in the same period last year. Sales climbed to US$82.1 million (K231 million) from US$73.8 million (K207 million).While the average price per tonne of crude palm oil climbed to US$767 (K2,154) from US$747 (K2,098), production fell to 86,025 from 87,690 tonnes.NBPO said Dann was “leaving the company to pursue other interests” and will work until Aug 31 to help smooth the handover. During the handover period his duties will be taken over by chief financial officer Amir Mohareb.Mohareb, who previously worked closely with Dann, is promoted to the top finance role and is expected to take up all of Dann’s operational duties following a three-month handover.Mohareb, who will “not immediately” join the board, currently works out of the PNG office and will transfer to the main office in Singapore following the promotion.Its production at the Liverpool plant will start processing crude oil delivered from its PNG plantations. “Progress at our UK palm oil refinery in Liverpool has been good and the plant is due to commence operations within the next month,” the company said.The group has already negotiated a series of multi-million pound supply deals with clients such as United Biscuits and cereals maker Jordans.Regular shipments from plantations in PNG will supply the Liverpool plant.

EON Cap's board to present proposal to shareholders

KUALA LUMPUR: EON Capital's board of directors will present a proposal by Hong Leong Bank to acquire the former's assets and liabilities with RM5.06 billion cash or RM7.30 per share in an EGM soon.
MIMB Investment Bank said in an announcement Friday on behalf of the board that a resolution would be tabled at the EGM on the proposal as well as the proposed distribution of the cash proceeds arising from the disposal to the shareholders.
The investment bank said this was being done after taking into consideration Credit Suisse Securities (M) Sdn Bhd's opinion that the offer was not fair from a financial perspective.
Credit Suisse was appointed as the independent adviser for the deal.
MIMB also said EON Capital's board member Ng Wing Fai's views would also be included in a circular to shareholders for the upcoming EGM. Ng, whose Primus Pacific Partners (HK) Ltd held a 20.2% stake in EON Capital, has expressed disagreement with the board over the offer.
MIMB said after taking into consideration Credit Suisse's opinion, the advice of the international adviser Goldman Sachs and all relevant aspects of the offer, the board has resolved that the proposed disposal was in the best interest of the bank.
MIMB said should the acquisition be passed, the cash distribution would be through a special dividend estimated to be about RM3.30 billion based on EON Capital's audited financial statements as at December 31, 2009 and, a capital reduction exercise amounting to RM1.76 billion.

Tengdui appointed to Petromin board

PAPUA New Guinean accountant Richard Tengdui has been appointed to the board of Petromin PNG Holdings Ltd.He has been appointed a non-executive director for a three -year term that took effect last May 5.Tengdui was nominated for appointment by Petromin board chairman Brown Bai, based on his performance as independent external member nominated by Certified Practicing Accountants of PNG to the Petromin audit and compliance board sub-committee. In welcoming Tengdui to the board, Bai said Tengdui’s wealth of experience in accounting, auditing and taxation would greatly enhance the boards ability to make balanced investment and management decisions.Tengdui’s appointment was made early this month by Petromin trustee shareholder Prime Minister Michael Somare.

NGE allots A$47m for drilling

AUSTRALIA’s New Guinea Energy (NGE) Ltd and Canada’s Talisman Niugini Ltd will now commit more than A$47 million (K118 million) to its drilling and seismic testing activities in Western province. The testing and drilling activities are on four petroleum prospecting licence (PPL) areas PPL266 and 267 – 100% NGE owned; and 268 and 269 - in shared ownership with Talisman (50-85% NGE and 15-50% Talisman).Michael Arnett, executive chairman of NGE, said last Friday a first well was in sight and that they were now mobilising the drilling programme on PPL 267- Panakawa.He said this during the sixth annual general meeting (AGM) in Port Moresby last Friday.NGE now has A$25 million (K63 million) available, of which about 40% will go to the testing and drilling of four PPL areas (together with Talisman) and also to fund other immediate activities. Last month, NGE executed a drilling contract with Australian Drilling Services Ltd to secure their Kremco ‘K 650” rig (Rig 6) for the drilling program on Panakawa prospect.Arnett said subject to timely completion of obligations by third parties, the obtaining of necessary PNG government approvals and other technical and environmental issues were expected early to middle of next month.

Shell: Bullish LNG growth

PERTH: Worldwide demand for liquefied natural gas (LNG) will almost double to between 350 million tonnes per annum (mtpa) and 400 mtpa by 2020 compared with about 200 mpta currently, global energy giant Royal Dutch Shell says.Queensland’s booming coal seam gas-to-LNG sector was entering a new phase of growth and investment, and would play a major role in meeting rising demand for the fuel, Shell senior executive Anne Pickard said.Pickard, who is executive vice-president of Shell Upstream International’s Australian arm, said the energy giant remained hopeful that it would complete its proposed multi-billion-dollar joint takeover of Brisbane-based CSG producer Arrow Energy that was being undertaken with PetroChina Ltd.She also said Australia represented the key plank in Shell’s push to boost its LNG output.“Globally, we aim to add around 15mtpa of LNG capacity by 2020, and much of that effort and investment will be focused in Australia, making us one of the biggest investors in the country,” Pickard told the Australian Petroleum Production & exploration Association Ltd conference in Brisbane yesterday.“If the (Arrow) transaction is completed, we will be in a position, through Arrow, to establish an integrated CSG-LNG operation.“It will bring together Arrow’s expertise as a leading coal seam gas operator, Shell’s LNG know-how, and PetroChina’s access to the Chinese energy market.“We are excited about this project (Arrow’s Curtis Island LNG project at Gladstone) and hope the joint acquisition is successful.” – AAP

WNB oil palm growers badly hurt by rains

THE oil palm sector in West New Britain province has been hard hit by continuous rains since last October.Destructions have been caused to road and bridge infrastructure which affected small oil palm growers within the Bialla district.Small growers were unable to sell fresh fruit bunch (FFB) and were deprived of income to pay for various needs including school fees.Between January and March this year, some growers especially from Silali, Tiauru and some parts of central Nakanai areas lost their palm produce as road networks were destroyed, thus preventing the delivery of FFB to the Hargy mill in Bialla.Temporary civil works carried out on roads recently was a relief to the affected growers as fruit trucks had gradually accessed the growers’ harvests for the month of April.Small oil palm growers were relieved of their anxieties when FFB delivery trucks picked up their produce which enabled them to earn hard cash.

PNGWIB welcomes Chinese investors

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By PATRICK TALU
SMALL to medium scale business entrepreneurs in Papua New Guinea have invited and welcomed Chinese entrepreneurs to invest in PNG.President of PNG Women in Business (PNGWIB) Janet Sape welcomed delegates of various small to medium scale entrepreneurs led by Shanghai Federation of Industry and Commerce (SFIC), who are in the country looking for business opportunities.Sape said PNG was a place of opportunities and they would find it suitable and conducive for investment.She said such investments in partnership with local entrepreneurs would enhance stronger business cooperation between Shanghai and PNG encouraging growth and sustainability of local business.Sape said she would be taking four delegates from PNGWIB to attend the Shanghai Expo 2010 and seek more opportunities for women.A local business-woman, who is involved in catering services, said it had been very difficult doing business in PNG, especially when seeking loans at the commercial banks.“If the Chinese are interested in PNG, it will give us the opportunity to go into partnership,” the women, who wished to remain unidentified, told The National yesterday. Many small business owners turned out in numbers and met with the delegates and exchanged information at a seminar yesterday at Airways Hotel.The aim of the seminar was to enhance the understanding and cooperation with different PNG chambers and relevant organisations in their endeavour to promote the external cooperation for Shanghai Small to Medium Entrepreneurs.The companies’ interests include scrap tyre and waste rubber processing line, investigation of the urban infrastructure market, real estate and construction and technology.While most of the visiting delegates are here to discuss potential joint venture deals in their specialised business activities, others are here to seek trade and investment opportunities.

Aussies move in to secure space in LNG

WHILE Papua New Guineans are complaining about their inability to win contracts from the PNG liquified natural gas (LNG) project, north Queensland businesses are moving into high gears organising themselves to get a slice of the action.President of Port Moresby Chamber of Commence (CC) David Conn was in Cairns last week to brief businesses there on how to get involved in the PNG activities while the Townsville CC organised a breakfast meeting with the Australia PNG Business council to discuss business opportunities in PNG.Conn attended a meeting in Cairns on April 21, where about 170 businesses were represented. The theme of the forum was; “Partnering with PNG” by people wanting to export their services and expertise to the gas resources development projects.The “Partnering with PNG” forum, co-hosted by Advance Cairns and the Cairns CC, will feature a panel session and key guest presenters offering extensive and current business experience working with, and in PNG.Conn provided a “warts and all” advice on what it takes to be involved in the PNG market, while Carl Valentine, a Port Moresby partner with PricewaterhouseCoopers with significant experience in the PNG market, gave attendees information on technicalities of doing business with PNG.

Indon ‘money guru’ to head World Bank

WORLD Bank (WB) president Robert B. Zoellick has announced the appointment of Sri Mulyani Indrawati as managing director of the World Bank Group.As Indonesia’s minister for finance since 2005, Indrawati has guided economic policy for one of the largest countries in Southeast Asia, and one of the biggest states in the world, navigating successfully in the midst of the global economic crisis, implementing key reforms, and earning the respect of her peers across the world.“I am delighted to announce the appointment of Sri Mulyani Indrawati. She has been an outstanding Finance minister with in-depth knowledge of both development issues and the role of the World Bank Group,” Zoellick said .“As a member of the senior team, she will play a key role in helping to lead the bank as we move to strengthen client support, implement our reform programmes, and anticipate future challenges.”Prior to her position as finance minister, Indrawati served as state minister and chair of the Indonesian national development planning agency.Between 2008 and 2009, she served as coordinating minister of economic affairs.From 2002 to 2004, she was an executive director on the board of the International Monetary Fund.She has been on the faculty of the University of Indonesia and was a visiting professor at the Andrew Young School of Public Policy at Georgia State University.Accepting the appointment Indrawati said: “It is a great honour for me and also for my country to have this opportunity to contribute to the very important mission of the bank in changing the world.”

Landowner company into joint venture

Source:
By PATRICK TALU
LOCAL landowner company (lanco) Massco PNG Limited (MPNGL), South Korean-based firm, CoDA PNG Ltd, and associates company Seohee Construction Ltd (CPNGL), have entered into a joint venture agreement to participate as major contractors in the PNG LNG project.The MoU was signed by MPNGL executive chairman Jerome Kairi, CPNGL chief executive Joshua Chi and Kim Young-kim of Seohee Ltd in Port Moresby yesterday, witnessed by board of directors of MPNGL and CPNGL representatives.CPNGL and Seohee are amongst the top three planning and design architecture and property development company in the South Korea with branches in the Britain and the United States.MPNGL is the umbrella lanco of the Gobe Field Engineering (GFE), from Gobe main PDL 4 in Southern Highlands province.During the signing of the joint venture agreement between the three companies, Kairi said: “The occasion signifying our desires, hopes and aspirations to meaningfully participate directly in the engineering procurement contractors (EPC) construction and not as subcontractors to EPC.“It also voices out our capacity and capabilities to meet the projects contracts schedule,” Kairi said.He added that the joint venture company was for the purpose of long term sustainability and maximising benefits and capacity building for lancos.Kairi said the joint venture was not duplicating the GFE functions but a commercial venture with GFE’s blessing.“We want to prove that we can be competitive with major contractors.”During an interview with Chi as to what specific project CPNGL was looking at the LNG project, he said: “As a specialist planning design and architecture, we are looking at all aspect so long as our services are required by EPC.“We are also looking at project managements and property development.”The signing had paved the way for equipment mobilisations from South Korea into the project construction sites before June in order to kick start the project.

Saudi company wins contract

SAUDI Arabia-based Red Sea Housing Services (RSH), the world’s leading provider of remote site housing, has been awarded US$127.9 million ( K352 million) contract by Chiyoda-JC Joint Venture (CJCV), to build housing facility for LNG project.The contract is specifically to build liquefaction and storage facilities and other housing facilities at Portion 152 near Papa and Lealea areas in Central province.ExxonMobil has awarded the engineering contract to CJCV, a company specialised in multi-disciplinary and construction of major housing facilities to cater for Esso Highlands housing facilities.CJCV then sub-contracted RSH to build the do the work.In a statement released by RSH, construction is expected to be completed next November and will accommodate the LNG project workforce.Chairman of RSH Dr Majid Al Kassabi said: “We are pleased to have this opportunity to build a high-quality housing facility for the PNG gas project.“This reflects our reputed expertise and commitment to provide the best and durable housing solutions for ExxonMobil Corporation”.Don Summer, managing director of ASH, said awarding the new contract to RSH was based on the company’s reputation and craftsmanship spread out in different countries of the world including Africa.Meanwhile, a local contractor who did not want to be named said it was a slap in the face for local contractor like him.“It undermines the capabilities of local business,” he said.

NBPOL completes CTP PNG take-over

THE New Britain Palm Oil Limited (NBPOL), a large scale integrated industrial producer of sustainable palm oil, has completed its acquisition of the 80% of shares in CTP (PNG) Limited, according to a statement in its website.Two months ago, the company announced the proposed acquisition of CTP PNG for a considered price of US$175 million (about K482 million) payable in cash, plus an additional consideration in relation to stocks and capital expenditure.NBPOL said the completion of the CTP PNG acquisition was conditional upon entering into a US$200 million (about K550 million) 12-month facility with Standard Chartered Bank and the ANZ Banking Group Ltd and approval by ordinary resolution of the company’s shareholders being obtained at the general meeting on April 15.NBPOL said these had been satisfied and the acquisition was now complete.The acquisition includes the addition of more than 25,000ha of established and producing oil palm plantations, and five mills to the company which increases NBPOL’s established plantation area by almost 50% and is comprised of estates close to its current centre of operations.NBPOL chairman Antonio Monteiro De Castro said: “The board was delighted to have completed this transformational acquisition, which is strategically and geographically an excellent fit.“The directors of NBPOL believe that the acquisition not only represents compelling value but also has the potential to be earnings enhancing for the company.“NBPOL will benefit from greatly increased production, economies of scale, operational efficiencies, and a larger potential source of fully segregated, palm oil, available direct from plantation to consumer,” he said.

Lae’s Voco Point opens new hardware

By GABRIEL LAHOC
THE Voco Point seafront in Lae, Morobe is experiencing a renaissance of business activities with the recently constructed Voco Point Hardware (VPH) officially opened last Saturday at a ceremony witnessed by members of the public, clients and customers.Operating as a subsidiary of Mukito Suppliers Ltd, VPH is a 100% nationally-owned hardware shop specialising in general, industrial, electrical and agricultural supplies.From humble beginnings in Goroka, VPH brings competition to other hardware suppliers in Lae, with a strong faith to provide the best service and prices to customers.The hardware shop may be small compared to other established hardware shops, however, the management is of the firm view that it is a very big achievement in terms of ownership and investment by any Papua New Guineans.“It’s a big achievement for all small nationally-owned businesses, as most times, these businesses have been overlooked by bigger foreign businesses,” proprietor Allan Mandi said.He started his business in 2004, from a start-up capital of K900, which he received as finish pay from another hardware shop.VPH is located at the junction of Frigate Street and Seagull Street, opposite Trends Beauty Saloon and The Nationals Lae bureau office, and has current staff strength of 20 working under manager Charlie Lapila.VPH promises very-competitive prices and services, which includes special deliveries, with major clients from the rural districts services in Eastern Highlands such as Department of Agriculture and Livestock and the University of Goroka.

EC to prepare businesses for opportunities in LNG

By SHEILA LASIBORI
PORT Moresby-based Enterprise Centre (EC) has been contracted to prepare PNG businesses for business opportunities in the PNG liquefied natural gas (LNG) project. The EC within the PNG Institute of Banking and Business Management (PNGIBBM) at the ToRobert business training centre at Konedobu is under a five-year contract with project operator Esso Highlands Ltd to prepare the vying business organisations to meet global business standards.And EC will not be awarding contracts for the PNG LNG project but assist businesses prepare themselves for opportunities in the project, PNGIBBM executive director Ray Clark said.The contract agreement was signed between the parties on Jan 19 this year, Mr Clark said.“Our job is to prepare businesses in the best way we can. We do not decide on the selection of businesses.“We facilitate communication between domestic businesses, suppliers, contractors and subcontractors.“In effect, we are a country notice board,” Mr Clark said, after several questions on EC’s business database it created recently to assist business orgnisations that needed its help to meet business requirements.He said EC was maintaining a PNG Supplier Database.Mr Clark also said to date, there was no business development centre in the country to assist businesses to be viable to reach greater heights in their operations.

Oil Search to prove contractible reserves

THE two largely independent core gas development streams for Oil Search Ltd is the dedicated fields for the PNG liquefied natural gas (LNG) project and other fields and exploration.According to Oil Search (OSL) managing director Peter Botten, the objective is to prove up enough proven contractible reserves to underwrite trains three and four in the gas project.For the PNG LNG dedicated fields in the material core reserves, there is already proven (1P) 300 million barrels of oil equivalent (mmboe) – all sold. Then the proven and probable (2P) 500mmboe (OSL share).“Focus on moving 2P into 1P contractible category through field development optimisation and further appraisal.”Then in the other fields and exploration, existing proven and portable resources (2C) of 281mmboe (OSL share) yet to be commercialised.There are programmes to appraise these discoveries and explore for new gas underway, while developing material portfolio ex PNG LNG.

Local companies fear missing out on LNG project

By PATRICK TALU
LOCAL businesses and landowner companies (lancos) are concerned they are most likely to miss out on opportunities to participate in the PNG liquefied natural gas (LNG) as sub-contractors.Several landowner companies and local business representatives said the stringent criteria used by the engineering procurement construction (ECP) contractors for various phases of the LNG projects would put them on the losing end.The representatives raised their concerns during a workshop conducted by LNG Enterprise Centre to facilitate communication between national suppliers, contractors and subcontractors for the Esso Highlands operated LNG project in Port Moresby.Philo Lala, a representative from a landowner company along pipeline areas from Kairuku where the proposed LNG pipeline would run said: “Stringent criteria that the ECP contractors have will make us losers because we do not have the financial capacity especially for lancos as required.”Among those criteria, financial and capacity and track record of successful management and locally registered companies are the main factors that would determine the awarding of contracts.Ms Lala said: “Some of the lancos have been just registered in order to participate in the LNG project and how does ECP expected us to have the full financial capacity?“We have financial arrangements with lenders in place as well as partnership with existing businesses hoping that we would be awarded sub-contracts.She stressed that if such criteria were used, she feared they might be overlooked for contracts they should be have qualified for.

OSL posts 5% gain

OIL Search Limited (OSL), PNG’s oil and gas producer yesterday posted a 5% gain in first-quarter output, while its sales revenue more than doubled on the back of higher oil and gas prices.The Australian-listed firm yesterday said output for the March quarter was two million barrels of oil equivalent (boe), compared with 1.90 million boe a year ago, thanks to new production wells drilled at mature oil fields.Revenue for the quarter jumped to A$133.8 million (about K366 million) from A$68.6 million (K187 million) last year.OSL said as with all other major Australian oil and gas firms, the company was realigning its business to focus on the burgeoning liquefied natural gas (LNG) sector.OSL, a partner with ExxonMobil Corp in the PNG LNG export project that was sanctioned last year, said the project has started to mobilise key engineers and contractors into the country and has begun early construction activities at the plant site.The A$15 billion (K41 billion) LNG project will produce 6.6 million tonnes per year of LNG via two production trains when it comes online in 2014.The firm did not give an update to its 2010 production guidance, which it has earlier estimated to fall 10% from last to be between 7.2-7.4 million boe.Most investors are looking beyond OSL’s short term performance figures and focusing on progress at the PNG LNG project, which is OSL’s first foray into the business.

20 foreign firms vie for LNG sub-contracts

AT LEAST 20 international companies are already vying to be subcontractors in the plant construction of the PNG liquefied natural gas (LNG) project.Although this information has not gone down well with PNG companies and those based in the country, major contractor Chiyoda-JGC Joint Venture (CJJV) says they have to adhere to the timeline pertaining to the construction phase of the project.Chiyoda’s external affairs director Takumi Hoshino said they were yet to award contracts to some of the international companies that had started talks with them and no company had been awarded contract to date.“We have to construct accomodation very fast to cater for mobilisation and to cater for 8,000 to 9,000 workers,” he said in relation to the camp facility proposed for Portion 152 on the outskirts of nation’s capital.“The subcontractors (have) informed that they will bring into PNG pre-fabricated goods for construction,” Takumi said, much to the disappointment of the representatives of PNG companies that attended the four-day workshop between local businesses and engineering, procurement and construction (EPC) contractors last week.This was at the Enterprise Centre of the Institute of Banking and Business Management (IBBM) at Konedobu, Port Moresby.Some of the attendees were particularly concerned that the subcontract business opportunities during the construction phase may be given to international companies.“What opportunity have you given to PNG companies to participate in the LNG project?” one attendee asked.In response, Mr Takumi said as main contractor CJJV (EPC3) was ready to maximise in giving opportunities to companies to be subcontractors.“There has to be quality control and experience. Then they will require a lot of work to do here so they will subcontract here (PNG),” he said of the vying international subcontractors.A response which got a participant to challenge ExxonMobil to put in place a monitoring system to make sure such contracting of PNG companies by international subcontractors did take place.“I do not think you can do everything because you have no experience … you never constructed a LNG plant before,” Mr Takumi told the gathering.The plant construction is scheduled to start in August/September following the site preparation set to start in June and the LNG training facility at Port Moresby Technical College will take care of training for local workers.He said the engineering and procurement (EP) work was currently being done by about 100 engineers in Yokohama.Mr Takumi also revealed that landowner company (lanco) Laba Holdings Ltd would engage in labour recruitment of most of the 2,000-2,500 local workers for the construction. It is also contracted to provide security.And CJJV will recruit 200-300 local staff for its 600 total staff ceiling for its main to be established at portion 152.“We have to engage with a local company. All recruitment will be done by the representative lanco,” he said adding CJJV had consulted Department of Labour and has a manager in charge of recruitment.Other opportunities available to lancos are: camp maintenance, camp catering, and transportation of workers from camps to job sites.

Local companies fear missing out on LNG project

By PATRICK TALU
LOCAL businesses and landowner companies (lancos) are concerned they are most likely to miss out on opportunities to participate in the PNG liquefied natural gas (LNG) as sub-contractors.Several landowner companies and local business representatives said the stringent criteria used by the engineering procurement construction (ECP) contractors for various phases of the LNG projects would put them on the losing end.The representatives raised their concerns during a workshop conducted by LNG Enterprise Centre to facilitate communication between national suppliers, contractors and subcontractors for the Esso Highlands operated LNG project in Port Moresby.Philo Lala, a representative from a landowner company along pipeline areas from Kairuku where the proposed LNG pipeline would run said: “Stringent criteria that the ECP contractors have will make us losers because we do not have the financial capacity especially for lancos as required.”Among those criteria, financial and capacity and track record of successful management and locally registered companies are the main factors that would determine the awarding of contracts.Ms Lala said: “Some of the lancos have been just registered in order to participate in the LNG project and how does ECP expected us to have the full financial capacity?“We have financial arrangements with lenders in place as well as partnership with existing businesses hoping that we would be awarded sub-contracts.She stressed that if such criteria were used, she feared they might be overlooked for contracts they should be have qualified for.

Economy good: WB

WORLD Bank (WB) has delivered another positive outlook for PNG, highlighting the nation’s economic performance throughout the past two years and projecting a strong picture for its future prospects.The details and other information were delivered in the bank’s latest edition of its East Asia and Pacific Update, a six-monthly report into the region’s economic and social health.Despite operating against the external pressures resulting from the worst global recession in more than half a century, WB noted that PNG had recorded sound economic growth of 4.5% last year, compared to 6.7% in 2008.The WB reported that this strong performance was attributed in part to prudent fiscal policies and Government stimulus spending using payments from mineral resources saved over the commodity boom years.In moving forward, the bank has forecast strong opportunities for continued growth in future years particularly as developments of the groundbreaking liquefied natural gas (LNG) project continues to move ahead successfully.The historic project has the capacity to generate thousands of employment opportunities, inject billions of kina back into the local economy and stimulate significant follow on economic growth and development across PNG, and the wider Pacific region, throughout its 30-year lifespan.“Estimates suggest that the project will yield a 50 million barrels oil equivalent of natural gas and lead to US$3 billion (K8.2 billion) in average annual export receipts starting in 2013-14.By one consortium partner’s estimates, the project could turn PNG into the second largest LNG producer in Southeast Asia, after Malaysia and past Indonesia, by 2017.“Growth is projected to rebound strongly this year, as the construction of the LNG facility begins and the project directly and indirectly stimulates domestic demand.“Real GDP growth could increase by 0.8 percentage points a year during the construction phase alone and then perhaps by 15-25% per year during the 30-year life of the pro ject, doubling the country’s GDP in three to five years after the project becomes operational,” the Bank said.The LNG project and a number of other initiatives continue to instil renewed confidence amongst investors and consumers.

BPNG to monitor economic activity in line with LNG project

THE Central Bank will be closely monitoring the increased economic activities in line with the start of the construction phase of the PNG LNG project.Central Bank governor Loi Bakani in the economic bulleting, for the December quarter last year, said this would be in line with the bank’s projection of inflation at 8% for this year.In the bulleting released on Tuesday, Mr Bakani said: “The upside risks to inflation could come from a weaker kina, increased economic activity and, thus, increased domestic demandpressures associated with the commencement of construction for the LNG project; high imported inflation, increased wage pressures, and excessive Government spending.“The Central Bank will closely monitor these developments and adjust its monetary policy stance wherenecessary to contain inflation,” he said.According to the bulleting an easing in the annual headline inflation from 10.2% in March quarter to 5.3% in the September quarter last year prompted BPNG to ease its monetary policy for December.The policy signaling interest rate, the kina facility rate (KFR) was reduced by 1.0% to 7.0%.Since then, KFR has been kept unchanged to this month in view of inflationary pressures.

Petromin,MISC join forces

MALAYSIA International Shipping Corporation (MISC) Berhad, one of the world’s renowned liquefied natural gas (LNG) transporters has entered into a joint venture (JV) agreement with Petromin PNG Shipping Limited a wholly-owned subsidiary of Petromin PNG Holdings Limited.MISC is a subsidy of Petronas, the Malaysian government owned oil and gas company.Petromin was created to hold the State’s oil, gas and mineral assets and is entrusted to maximise indigenous ownership and revenue gains in the mineral and petroleum sectors of Papua New Guinea.MISC in a statement on its website said it was selected by Petromin as its JV partner after going through a competitive bidding process where one other international LNG shipping company also participated.The purpose of the agreement is to incorporate a joint venture company (JVC) to provide LNG transportation solutions for LNG projects in PNG and to secure shipping contracts to support other general shipping requirements in the country.The agreement was signed last week at the Malaysian Petroleum Club in Kuala Lumpur by MISC’s Amir Hamzah Azizan, president and chief executive officer, while Joshua Kalinoe, Petromin managing director, signed for the PNG Government’s mineral and oil company.The ceremony was witnessed by Petromin chairman Brown Bai.The JVC, Western Pacific Shipping Ltd, which is to be incorporated in Bermuda Islands, will be 60% owned by MISC, with Petromin PNG Shipping Limited holding the remaining 40%.The JV establishment is also aimed at contributing to the export and import activities of PNG by providing world-class shipping capabilities, which eventually will be owned by Papua New Guineans, and modelled along MISC’s 40 years of extensive shipping experience.As one of the leading players in LNG shipping, with a total of 29 wholly owned and operated LNG carriers, this joint venture signals MISC’s entry into PNG’s oil and gas transportation industry. Through the joint venture, MISC will not only be expanding its energy related transportation business but will also contribute to Papua New Guinea’s capacity building requirements in the shipping business.The joint venture will also enhance the growth prospects of both companies in the LNG industry, especially in the Asia Pacific region. With the development of two and possibly three LNG projects, the Papua New Guinea LNG industry is estimated to grow to 14.6 million tonnes per annum by 2015.