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LNG WORKERS STILL A PROBLEM

OP/ED

THE PNG gas agreement was signed between the state and ExxonMobil in May 2008. At that point, it was almost certain that a liquefied natural gas (LNG) project would become a reality, at least in so far as the government was concerned.
Along the way, several other agreements were negotiated and signed, including the two benefits sharing agreements, finalisation of markets, the environmental impact study, front end engineering and design, execution planning, project financing, gas marketing and all the regulatory and permitting work including community and landowner consultation and financial closure.
Despite all that, two years on and PNG is still struggling to get sub-contractors organised for the project and is critically short on manpower.
Already, there is talk about recruiting welders from neighbouring Fiji and even heavy equipment operators from overseas.
This would indicate to us that the government was so concerned with getting the project off the ground that it neglected its primary duty to ensure the people of this country get maximum benefits from PNG LNG.
There should be several thousand welders and heavy equipment operators in-country. Indeed, PNG has had world class mines in Bougainville, Ok Tedi, Porgera, Misima, Kainantu and Hidden Valley among others. These workers should be called up.
Even if the workers were not to be found, training welders and heavy equipment operators should take no more than 24 months. That was the time PNG had between May 2008 and this year. Yet, we did not move on it.
The same goes for project sub-contractors.
Unless the government insists on a certain amount of work and labour force to be exclusively Papua New Guinean, ExxonMobil is going to draw experienced workers from its present operations all around the world to ensure this project gets off the ground on the target date of 2014.
Project proposals have been available to the government for as long as the project has been discussed, yet little thought was put to mobilise and prepare our workforce and our business community to take full advantage of the project.
The LNG project being championed by ExxonMobil proposes to draw gas from three large gas reservoirs in the Southern Highlands and Western.
The development envisions the construction of the 960-million-cubic-feet-a-day gas-conditioning plant and a gas pipeline to a liquefaction plant near Port Moresby. The LNG plant would produce six million metric tonnes a year of LNG for shipment to international markets. The gas is to be transported to the plant by a 440-mile pipeline (250 miles subsea).
Liquids recovered at the existing Hides gas plant would be combined with crude oil from the oil operations and transported through the existing oil export system to the Kumul platform, an offshore tanker loading facility.
Just from this information alone, the amount and size of work can be worked out. A select committee should already have been at work evaluating the needs of the project and reviewing present capacity.
All this while, all we have heard is that the benefits would be substantial and the project could transform the economy of PNG and doubling its gross national project. These are generalities we have heard and were content with but nobody has had a closer look at just how PNG is going to benefit from the project.
Indeed, looking at the project now, it would appear that the government might have given away far more than it should have in tax concessions and other benefits.
The company cannot be expected to utilise its national content plan to assist PNG’s manpower problems.
Esso Highlands might be committed to some training for project construction and ongoing operations, buying local goods and services, building local supplier proficiency and assisting communities but its greater and primary focus is on getting the project off the ground and delivering on the gas to the exclusive markets it has signed contracts with.
If there are easier ways to achieve its aim, such as bringing in ready trained and experienced workforce from its existing projects, that is the course of action it will take.
It is crucial, therefore, for the government to insist on a number of jobs to be reserved for Papua New Guineans and to ask the company on how many workers it will require and to locate them in country or train them if necessary.