PNG Projects to Watch in 2020
The Peopleconnexion PNG team take a look at Papua New Guinea’s multi-billion dollar pipeline to be delivered over the next decade.
Mining, Oil & Gas
Image source: LNG World News
Back in April, Total, ExxonMobil and Oil Search signed a deal with the Papua New Guinean Government to effectively kick off the US $13 billion Papua LNG project. The original agreement for the multi-billion-dollar project set the wheels in motion for FEED (Front End Engineering Design) contractor selection to commence and FEED activities to take place before an FID (Final Investment Decision). Since that time, the project has been officially put on hold while a temporary court order taken out by a landowner umbrella association is in place.
Image source: Oil Search
With the end of the year in sight, Oil Search’s target to reach a deal with the PNG Government by 2020 is uncertain, with negotiations likely to continue into next year.
Before the recent announcements, PNG LNG was poised to expand just months after Papua LNG with Santos having secured a 14.3 percent stake in PRL 3.
Under PNG LNG’s expansion plan, the P?nyang project (PRL 3) will support an additional train ? meaning PNG LNG’s combined three trains will have capacity to produce somewhere in the ballpark of 2.7 million tons of LNG annually. This would essentially double the current LNG exports from PNG.
You can imagine from a recruitment standpoint how this would create flow-on effects in so many different sectors ? logistics, transport, supply chain, FMCG, hotels, professional services.
At the Australia Papua New Guinea Business Forum and Trade Expo earlier this year, Twinza Oil Managing Director Huw Evans revealed plans for the offshore gas project to be developed in two phases ? with the first due to start production in 2022.
For those unfamiliar with the Wafi project, this long-awaited copper-gold project would prove to be one of the country’s largest developments if given the green light. With a 100km project footprint and a challenging location, careful planning and community involvement is key.
This mammoth project roughly $1 billion already invested in the extensive exploration stage of the project, and another $3 billion set to be spent to make the mine operational, and another $3 billion required to maintain and deliver the project in the first 5 years ? it’s clear to see why the company is now seeking to understand what the ?rules of engagement? are under the new mining legislation, and how the project will uplift the community.
Sepik Development Project
PanAust’s Sepik Development Project mega-project estimated to be worth US $8 billion (K26.5 billion), has pivoted its focus to becoming an integrated development encompassing a roads, port, hydro power and dam infrastructure project in addition to the copper-gold mine.
The integrated development was announced last year, and if it goes ahead ? it will shape up to be a larger project than Wafi Golpu.Once completed, the new integrated development aims to create a new economic corridor within the West Sepik (Sandaun) and East Sepik provinces, supporting up to 5,000 people during its construction phase.
In terms of timelines, this ambitious project still looks to be far in the future considering its challenges in the road ahead. The dam and associated hydro power project boasting a 600MW power station to power the Sepik region would prove to be a challenging venture, requiring a record amount of land to be acquired for a dam project and extensive work with communities in terms of relocation.
The dam alone is estimated to have a backwash radius of around 150 square kilometres. With the project’s new scope, an integrated road network would be used for freight as opposed to river transport, bringing another layer of complexity to a major project.
Hotels & Tourism
PNG’s Tourism Hub Program
Image source: Escape
As part of last year’s budget announcements, the PNG Government unveiled their intention to invest in PNG’s tourism sector by establishing a tourism hub in Kokopo, East New Britain. Since then, we haven’t seen much movement on this project, aside from a procurement plan presented by The World Bank in mid-May.
Chinatown in Port Moresby
Yes, you read that right. Last month, it was announced that a Chinese syndicate would spend more than AUD $400 million (almost a billion Kina) to develop a Chinatown in Port Moresby.
Image source: ABC News, Natalie Whitling
If the development goes ahead it would become the largest Chinese investment in the country, and be home to apartments, shops, restaurants, a cinema and hotel.
Image source: Office of the Prime Minister
Following last year’s APEC Summit, all eyes and ears were on the Papua New Guinea Electrification Partnership and their promise to support the PNG Government in bringing electricity to 70% of the country by 2030.
The project was officially launched in February at the Okapa Station in Eastern Highlands, however little has been heard since. Australia is set to commit an initial AUD $25 million to the initiative this year, as part of the broader AUD $2.4 billion 11-year plan.
Ramu 2 Hydropower
If all goes according to plan, we should be seeing work commencing on the long-awaited Ramu 2 hydropower plant in Eastern Highlands.
Image source: EMTV
As it stands, the PNG Government still wants to develop the Ramu 2 project in Eastern Highlands under an AUD $2.8 billion deal with the consortium led by Shenzhen Energy Group.
Civil Aviation Development Investment Program (CADIP)
As part of the country’s broader Civil Aviation Development Investment Program (CADIP) being rolled out by National Airports Corporation, airports across PNG have been upgraded, including the construction of new terminals, improved pavement and apron extensions.
Mt Hagen new terminal (image source: NAC)
The deadline for submissions for one of CADIP’s final packages, as part of Tranche 3 closed this week. Worth almost AUD $700 million, the Asian Development Bank-funded program involves redevelopments, pavement strengthening, runway extensions and new terminals for 22 airports across the country.
PMIA new apron (image source: NAC)
With major works at the Port Moresby, Mt Hagen and Kimbe airports complete, further redevelopments in Rabaul, Tari, Kavieng, Madang, Wewak, Mendi, Wapenamanda, Vanimo, Gurney, Kerema, Kiunga, Tokua, Momote and Buka are still to be finalised.
With the program coming into its 10th year, there’s still a way to go before the expected 2022 completion dates.
International Nadzab Airport – Lae
This one’s been a long time coming! The PGK 600 million project has just been approved, due to receive a new passenger terminal building, new taxiways and apron, a runway extension and upgrades to the existing taxiways and apron.
Image source: Post Courier
We can expect to see this project kicking off in 2020.
Kumul submarine cable network
Image source: PNG DataCo
PNG DataCo has completed stage 2 of the project, with a new undersea cable being laid from Port Moresby to Madang via Alotau, Popondetta and Lae. Launched in 2017, the project is part of PNG’s ambitious National Transmission Network project aimed at bridging the digital divide and rolling out faster and reliable telecommunications infrastructure. Once the remaining systems (1 and 3) are complete, the network will connect 14 coastal provinces across PNG.
Roads & Highways
PNG Highlands Highway
If you’ve ever travelled on the Highlands Highway, you?ll know it’s in need of some serious TLC.
Image source: Loop PNG
The rehabilitation project, part of an AUD $1.2 billion fund committed by Asian Development Bank, aims to repair and replace 430km of highway between Kagamuga airport in Mt Hagen and Nadzab airport in Lae. The ambitious project was awarded to Chinese contractors ? MCCL, China Wu Yi and CHEC, who will roll out the project over the next 10 years.
Bridge Replacement Project
Since its original conception in 2011, the Asian Development Bank-funded project has aimed to replace aging bridges across rural PNG with permanent two-lane structures across several national priority roads. So far, six bridges have been constructed across the Magi and Hiritano Highways, with 12 more being constructed along the New Britain highway.
We look forward to seeing what’s in store for Papua New Guinea in 2020!