Papua New Guinea is lighting up China, Japan, and Taiwan
Papua New Guinea’s mountain ranges and forest-covered hills have attracted the world’s biggest mineral and resource extraction players to tap its landscape. The minerals and energy extraction sector accounts for a good portion of export earnings of the country. 9 years ago, Exxon Mobil (XOM) built a $19 billion liquefied natural gas terminal in the country. The terminal now caters to the energy needs of China (FXI), Japan (EWJ), and Taiwan (EWT). Companies such as China Sinopec (SNPMF), Tokyo Electric Power Company, Japan’s Osaka Gas, and Taiwan’s CPC Corporation, have contracts to import LNG from Papua New Guinea.
To secure some gas for its domestic market
Energy trade has led this Pacific (VPL) (EPP) (IPAC) (GMF) nation to attract considerable foreign investment. However, a once self-reliant economy dominated by the agricultural, forestry, and fishing sector, may now need some of its exported resources for itself. For sustainable development in the region to continue, Papua New Guinea requires cheaper access to power. In the past, “we allowed all the gas to be exported,” said Prime Minister Peter O’Neill. “Now we want to secure some to go to the petrochemical industry.” In this regard, Japanese firms such as Itochu Corp. and Sojitz Corp. have already been approached by the government to set up petrochemical factories in the country.
According to Nixon Duban, the minister for the government’s petroleum and energy department, Papua New Guinea has already secured 15% of the gas production for its domestic market on one lease. The country is now expected to be looking at other leases for similar arrangements while making sure that the projects remain attractive to them and they don’t drive away drillers.
More and cheaper electricity to benefit Tuna canning in Papua New Guinea
Currently, just 13% of the population in Papua New Guinea has access to electricity. Securing resources for more and cheaper electricity generation should be a strong step towards its government target of electrifying 70% of its country by 2030. It should also provide the necessary boost to its electricity-powered industries, such as seafood canning. Currently, Papua New Guinea supplies 10% of the world’s tuna, valued at around $1.3 billion a year. As strong example of what can be accomplished, cheaper power would likely mean additional growth of Papua New Guinea’s global market share in this suddenly thriving industry.