Impacts of gas project reach new chapter in PNG

Transcript

The oil and gas multi-national Exxon Mobil says its US$19 billion Liquified Natural Gas project in Papua New Guinea has started production ahead of schedule.

There's an expectation that becoming a significant gas exporter will entail widespread benefits and development in PNG where the majority of people live without basic services.

The LNG project's developers say PNG is about to benefit from direct cash-flow to government and landowners to the tune of around one billion US dollars a year for the next three decades.

Johnny Blades had a look on the ground.

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The LNG project's six-year construction phase  underpinned unprecedented economic growth in PNG. While growth slowed up somewhat as the construction phase wound down, around the capital, the proliferation of cranes and new buildings are a sign that this is a city that is transforming into a major energy hub. Just out of Port Moresby, in Central Province, is the gas liquefaction plant where the finished product will be shipped out to mainly Asian markets under a number of long-term supply agreements. I decided to go and have a look at what's been described by PNG's business community at the country's next growth corridor. This  20 kilometre stretch northwest of Port Moresby has that rarest of things in PNG, a well sealed road. The road is busy, with many trucks and heavy utilities moving along it. This zone already has InterOil's Napanapa oil refinery, a power station, recently built dockyards and the brand new Kavuvu Business Park, all facilities linked to the gas and oil boom. I make my way to Roku village, a seaside community near the oil refinery, a village where dozens have found employment with the gas and oil sectors and several landowners have benefitted from leasing out land to the companies involved in these industries. One of the first villagers I meet is Heni Iramo.

HENRI IRAMO: Because of the LNG Project our living standard has rised. And as you can see, some of the houses, people are starting to build their own new houses. There's money coming in because of this LNG Project and also development coming into our area, in our village Roku, like the LNG Project, AES (Avenell Engineering Systems) and Napanapa oil refinery.

Julie Vari whose husband works at the Napa Napa refinery says the local benefits are not so much from the LNG Project itself.

JULIE VARI: All we are focussing on is the Interoil one, that's what we are benefitting from.

So has life improved?

JULIE VARI: Not really in a speedy rate but slowly we are getting there. There's a great need for teaching and education. We have the facility of aid post here but it's of no help since there's inadequate supplies here.

I speak to the village's Community health worker, Logae Ray, tasked with providing frontline health services at the aid post. His comments about getting the aidpost up to scratch speak volumes about the type of provider in grassroots PNG during this gas-boom era.

LOGAE RAY: Interoil came into the village for a meeting. So when they came for this village meeting with heads of all sectors in the community, I sat down with them. That was the time I prepared myself with my own statistics for my daily attendance and all things ante-natal, for mothers and women, all things to do with health. When I made a speech on that and presented it, it might have convinced these people that it should be looked at. So actually they went back, they had a meeting and through this proposal, they approved everything and then came up to this reality right now.

So the aid post building was recently renovated and expanded. The trouble is, there are not nearly enough supplies and barely any furniture inside. As with education, it's an area that's long been poorly serviced right across PNG according to Roku Village's Reverend Lakimomo, a pastor from the Unity Church.

REVEREND LAKIMONO: It's a clinic but we need it to be a health centre because in future we'll be having more people around our area because of this LNG and these Interoil developments. So we expect this clinic to be a health centre or something like that. And our school too - there's not enough classroom.

Despite the development increasing in the area, they still lack reliable water supply to meet the needs of a growing number of residents. And echoing what's happening in other areas of LNG's footprint, when big amounts of money comes into play, those not benefitting directly often look on in resentment. I pick up on some bitterness among various locals towards a resident who originally comes from East Sepik, but struck gold when he married into a Roku landowner clan:

"There's a bit of a problem on this side between two families, two clans. One wants the leadership and another one the land rights..."

"It's not good, he's not from this land. Right now, he's doing this, building these houses here, but he's not from here."

They're talking about Pius Pundi, whose family has enjoyed a handy windfall from the construction activity related to the LNG project.

PIUS PUNDI: Our gravel has been used for construction for the LNG Project, a lot of material was taken out from here and taken up to the LNG site. Yes, we get royalties for that.

Pius Pundi says he is entering into a joint venture with a PNG company and a Melbourne company to develop over 250 hectares of land adjacent to this village. He tells me they're going to create a town.

PIUS PUNDI: The township is going to be a typical township, it's going to include health centre, banking facilities, schools these sorts of things. And the houses we're going to build here will be based on Australian standards. So far we've registered over 500 interests.

With the first LNG cargo to be shipped to Asia markets in the next few weeks, it's estimated that Exxon Mobil's project will go on to produce more than nine trillion cubic feet of gas over 30 years of operations. The  corridor northwest of Port Moresby seems destined to undergo major development during that time. How the benefits from this gas project and others on the horizon come to be disbursed, and if the needs of ordinary villagers are met, remains to be seen.