PNG gas project obstructed

LANDOWNER problems are again causing trouble in Papua New Guinea, and this time it is the Hides gas project in the Southern Highlands province which is affected.

The Hides gas project is vital because it will be providing electricity power for the advanced stages of the giant Porgera mine, 70km away. The Kutubu oil pipeline is also subject to a landowner compensation claim, but this is con sidered minor by comparison.

The timing is terrible, given that the seeming resolution of the Bougainville rebellion has given the country much needed positive headlines. The chances of the Panguna copper mine on that island being opened in the next year or two remain remote, but at least it is now possible to begin conjecturing. Interna tional financiers have been very sceptical about loaning money to Papua New Guinea mining or oil projects since the Bougainville rebellion hit the world headlines, and the massive Lihir gold project has been experiencing trouble

raising finance.

Some observers in Port Moresby now fear that the problems with landowners could, by holding up Hides, put Porgera behind schedule and Porgera is vital not just for the mining companies involved, but for the revenue-starved Papua New Guinea government. Hides is 95 per cent owned by British Petroleum with the remaining share held by Oil Search Ltd.

A landowner group calling itself the Kigira Kihowako Association (KKA) said it would not allow Hides to go ahead until compensation and other matters are settled. The situation is even more complex because several groups are disputing ownership of the gas field area.

KKA accuses the companies of a divide and rule policy, offering compensation to some landowners and not to others. It said no study had been done to ascertain the rightful owners of the land over which the power line will run. Some landowners will be demanding payments of K 20,000 (U 5520,400) for the erection

of power pylons on their land.

Another group, the Hides-Porgera Power Transmission Line Landowners Association, has claimed that illiterate villagers claiming ownership of land along the power line route had made their marks on agreements without knowing what they were doing. The latest demands concerning the 261 km pipeline linking the Kutubu oil field and ocean loading terminal in the gulf of Papua are more annoying than a serious threat to the project, although the incident cannot help but further dent Papua New Guinea’s image. The Kikori Landowners Development Association which is recognised as a legitimate representative of landowners is now claiming K 35 million from the project developer, Chevron Niugini Pty Ltd, which is equivalent to 10 per cent of the cost of the pipeline.

Meanwhile, business people in Mt Hagen and other highlands areas claim commercial activity is grinding to a halt because of lawlessness. Reports indicate the towns are being roamed by criminal gangs up to 40 strong and that rape is a frequent occurance. □