September 9, 2008

Papua New Guinea Chases UAE Investment in Gas Project

Text of report by Papua New Guinea Post-Courier website on 9 September

The government is going around the world looking for money to secure its equity in the multi-billion-kina liquefied natural gas (LNG) project. Amid this, the government, led by State Enterprises Minister Arthur Somare, will be briefing the opposition on the LNG gas agreement as well as the project today. The opposition will, after the briefing, decide whether to boycott the 18 September parliament sitting.

Mr Somare and the Independent Public Business Corporation (IPBC) managing director Glenn Blake travelled last week to the capital of United Arab Emirates, Abu Dhabi, to find money to fund the government's 19.4 per cent equity in the PNG LNG project of about 3bn kina (1bn US dollars).

A senior IPBC executive revealed this to the Post-Courier yesterday, hours before Treasury Secretary Simon Tosali told the newspaper that cabinet had instructed "everyone" to go out and look for international partners who could fund the government's equity in the project.

"Yes, the minister (Mr Somare) did go to Abu Dhabi to find finance for the LNG project but it was just preliminary discussions. He's been trying to keep that at a low key," the executive said. "He just went there to hold preliminary talks with Abu Dhabi banks on the possibility of seeking competitive financing for the Government's share in the LNG.

"They've talked with six banks in Abu Dhabi because you know Middle East countries have heaps of cash. We might be able to get a very good deal there," he said, adding the discussions were just "preliminary with no commitment being made yet".

The near-30bn kina LNG project is projected to double the size of the country's economy for a proposed 30-year life when it gets off the ground in 2013 or early 2014.

The executive was asked if it was true Mr Somare did talk to some sheikhs, but said that was not the case because Mr Somare and Mr Blake only held discussions with the banks which had the money.

Asked why Mr Somare would travel all the way to Abu Dhabi, he said: "They have the money, we are after the loan."

Mr Tosali also said cabinet had instructed "everyone" to go out and seek funding for the government's equity in the project.

While brushing aside queries if he knew about the Somare-Blake trip and claims that Treasury officers were not allowed to accompany the two men, Mr Tosali said the government was actively seeking funding for its component in the project.

"Everyone is out there looking for the Government's funding for the project," he said. He said proposals would be provided to the cabinet of the proposed institutions or individuals interested to fund the government's part in the LNG project.

Originally published by Papua New Guinea Post-Courier website, Port Moresby, in English 9 Sep 08.

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