Moro Airport Blockade 21 Nov 2009. Credit: Damian Baker
By Damian Baker
Joint venture partners in Papua New Guinea’s liquefied natural gas (LNG) development announced the go ahead of one of the country’s largest resources projects in a statement earlier this week.
The AU$16.5 billion project will proceed, subject to the signing of final agreements. The consortium of companies involved in the operation includes Australian companies Oil Search, who control 29 percent of the venture, and Adelaide-based Santos Ltd (3.5 percent). Other members of the group include Tokyo-based Nippon Oil Corp (4.7 percent), Exxon (33.2 percent) with others including the PNG Government (16.6 percent) and miscellaneous landowners (2.8 percent).
It was announced in world business media this week that China Petroleum & Chemical Corporation (Sinopec) had signed a landmark LNG deal to purchase two million tonnes a year of the gas over 20 years from PNG.
However with potentially large incomes involved, local landowners – well-known for their fractious behavior during this and other projects – have continued to disrupt the developments. In signs of increasing local unrest, news wires quoted in mid November that a group of landowners had cut down large numbers of trees and rolled boulders on to the Highlands Highway to block access to the LNG project.
In addition, only days before the final LNG agreement was signed, disgruntled landowners unhappy over the direction of negotiations for the lucrative project knocked down power pylons near the LNG site. A local source who spoke to theangle.org this week said “power poles were cut down in the Ialibu area, in the Southern Highlands, and it has had a huge impact on the highway which links Moro to Mt Hagen.”
The highway links the LNG project to the outside world.
According to The National newspaper, the blockade started on Nov 26 with landowners cutting down trees and removing four culvert bridges. Eight power pylons were also felled leaving the town of Mendi without electricity. Our source described the situation.
“The road was completely blocked about 20km from east to west with power poles chopped down and crossing the road. “[It]has been reopened after seven days of closure but the township of Mendi had power cut to shops, bank, business houses, schools and the hospital.”
He added the electricity had yet to be restored and there had been no local discussion as to when this might happen and other protests are ongoing with landowners travelling regularly to Port Moresby to discuss unresolved issues with the Government.
The disruption impeded production at another controversial PNG resources development, the Porgera Gold Mine as
Current Oil Search facility burning off excess gas. 20 Nov 2009. Credit Damian Baker
the Oil Search Plant supplies power to Porgera’s Barrick Gold Mine in neighbouring Enga province. The mine, owned by Canadian-based Barrick Gold has said company teams were involved in restoring the power supply.
Porgera has had its own history of disruption with an earlier conflict at the mine in mid November seeing Special Operations Police allegedly using tear gas on illegal miners in an effort to quell unrest. The use of the tear gas is said to have disrupted a local school within the Porgera Special mining lease area.
Jethro Tulin, founder of the activist Akali Tange Association and Porgera resident, said locals have threatened to close part of the mine if relations between security police and villagers continue to deteriorate. He said he is concerned the situation may become inflamed if the mood does not change.
Disruption by landowners and villagers impacted by resource development projects in PNG are on the rise and in remote and difficult-to-access regions the unrest among locals must be seen as a serious threat to the many projects that foreign companies run in the country.
The LNG project alone is said to be expected to increase PNG’s economy by 3 percent and has already been factored into the PNG 2010 budget. However this must be seen as optimistic accounting by the Government considering the scope of the infrastructure needed to make the LNG project a success.
The 720 kilometers of pipelines that are to be laid through disputed tribal areas seem to be just one element of the project that could slow, if not halt altogether, the prodigious incomes projected for the companies and the PNG government from the LNG project.
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