O’Neill challenges Maladina over Papua LNG costs and Puma Energy sale rumours

Tensions flared in Parliament this week, as Member for Ialibu-Pangia Peter O’Neill directed a series of questions to Petroleum Minister Jimmy Maladina over the ballooning costs of the Papua LNG project and rumors surrounding the sale of the country’s primary fuel storage facilities.

The exchange highlighted growing concerns over the fiscal implications of the multi-billion-dollar gas project and the strategic security of Papua New Guinea’s energy infrastructure.

O’Neill, who was instrumental in the initial 2019 agreement with Total Energies, questioned why the project’s estimated cost has surged from $11.9 billion [USD] to a staggering $14.5 billion [about K62 billion].

He argued that the government’s decision to review the original contract has not only delayed production but may force the State to sacrifice billions in concessions.

"If we had stuck to the original agreements, we should be in production today," O'Neill said, when raising a supplementary question to Maladina.

The former Prime Minister demanded government to clarify what clawback benefits were actually achieved to justify the delays and cost escalations.

He further suggested that the State might effectively be funding over one-third of the project costs through these new arrangements.

In response, Maladina defended the current negotiations, asserting that while costs have risen, the final figures are not yet settled.

The Petroleum Minister clarified that the requested government assistance is much less than the $3.5 billion figure cited by O’Neill.

Maladina said any final submission to accommodate the new arrangements with Total remains subject to Cabinet approval.

The Minister admitted he would need to review the specific benefits clawed back by his predecessor before presenting a full ministerial statement to the Parliament later this week.

The debate shifted towards national security, as O’Neill raised reports regarding the potential sale of Puma Energy’s storage facilities to the United States government.

O'Neill questioned whether such a move, potentially linked to existing defense agreements, would leave PNG without alternative fuel storage options.

"Is this the only one in the country that we have to sell?" O’Neill asked, pressing for a confirmation or denial of the negotiations.

Minister Maladina, while confirming that Puma remains the sole major storage provider in PNG, distanced himself from the reports.

"I don’t know whether the US government is negotiating with Puma," Maladina responded, citing his full-time commitment to government issues over private sector dealings.

He said the matter had not come across his table and could not confirm the sale to the people of Papua New Guinea.

The Minister is expected to provide further details on the Papua LNG project's progress and the State's financial commitments in a formal speech to Parliament later this week.