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 Post subject: KIKORI & THE LNG BOOM
PostPosted: Thu Dec 08, 2011 10:00 am 
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Chris Warrillow has consented to me printing his following article which was recently published in UNA VOCE. It gives a good contemporary feel for what is going on up there.

Quote:
KIKORI AND THE LNG BOOM
(Communications and frustrations)

CHRIS WARRILLOW 29/11/11

Construction, by Exxon/Mobil, of the sixteen billion dollar Papua New Guinea Liquefied Natural Gas (PNGLNG) Project is well advanced, with first shipments due in 2014. The core gas reserves are trapped deep under the 3000 meter altitude Hides Range near Tari in the Southern Highlands Province (SHP). The first discovery well was drilled by BP in 1987.

This nine trillion cubic feet (9TCF), or greater, resource will initially also be supplemented by gas-caps from past oil discoveries – mainly the Kutubu fields which are in rapid decline after 19 years of production. Over the years gas was re-injected both to conserve a valuable resource and also to maintain reservoir pressure to enhance maximum oil recovery.

Incidentally Hides gas has, since the opening of the Porgera mine in 1990, supplied nearly all of the energy required to operate that mine. It drives the power generators that produce the electricity that is transmitted by cables and pylons across the Tari Basin thence over the main cordillera to Porgera.

The Kutubu oil fields’ gas-cap reserves are however much smaller than other gas reserves which will be connected to Hides as it is depleted in the years to come. Included in these will be the gas discoveries of nearby Angore (BP, 1989) and in future years Juha (Gulf Oil [subsequently taken over by Chevron], 1981) and P’nyang (Chevron, 1990). The latter two are in the Western Province (WP).

All these gas fields also contain varying ratios of condensate which will be ‘stripped’ and exported separately as liquids thus adding value to the LNG sales. Future discoveries are also anticipated (albeit of much smaller fields) as exploration continues – mainly by Oil Search Ltd and its partners.

Both BP and Chevron have long since left the Country after selling their PNG interests to Oil Search Limited. The latter retains its interest in the project as too does Santos.

Apart from the SHP and WP a third and fourth Province are also involved in the project – Gulf and Central. The gas will travel by pipeline 300kms to the Gulf coast and thence 400kms under-sea to a processing plant near Port Moresby, but just outside the NCD. There it will be liquefied for shipment to overseas markets.

The Hides gas will first be stripped of liquids and then the dry gas will go via the long-established but up-graded Kutubu facilities. The gas pipeline will then closely follow the existing oil pipeline route as far as Kopi on the Kikori River. Kopi is four kilometers downstream from the 1950s APC oil-exploration camp of Middletown. The oil pipeline continues to near Kikori, thence under the Kikori River and out to the Kumul Platform in the Gulf of Papua. There the oil is loaded onto large tankers.

The gas pipeline will however first head south-west from Kopi to the Omati River and then be laid under that river bed and out to sea and across the Gulf of Papua.

Large barges are frequently being towed through the delta from Pai’a Inlet, where loads of pipe are transferred from overseas ships, to and thence up the Kikori River to Kopi. There the pipe is unloaded and transported over-land to be connected (welded) piece by piece to join other sections being laid, in both directions, along other stretches of the route.

To detail the social and economic impact all this activity is having on PNG as a whole, and on the SHP and around Port Moresby in particular, would require most of the pages of Una Voce. I will thus here touch briefly only on PNG’s Cinderella province of Gulf.

In Kerema, the Gulf Province’s seat of government and administrative headquarters, few know or appear to care what is happening at Kikori some 175 kilometers to the north-west. In and around the District Headquarters of Kikori, where this 16 billion dollar project’s pipeline passes nearby on its way from the SHP to Moresby, life goes on as it has since before Independence. Little has changed for the good since I first visited in 1974.

The old District (formerly Sub-District) Office has long gone as too has its late-1970s replacement. In 2010 a new District Office and a new Treasury Office (complete with satellite dish on its roof) were built but are yet to be occupied – not that there is any office furniture or equipment! Due to a dispute over payment to the contractors both buildings remain locked up and are deteriorating rapidly due to the harsh wet tropical climate and inevitable vandalism. Mould is growing on the walls and ceilings as the only air to circulate is through the numerous gaps of missing louver blades.

With no office to work in, various Government Department staffs have long since retreated to Kerema and even Moresby (government in exile?). The few Public Servants who are from Kikori either ‘work’ from their homes on the station or are back in their villages.

Back in the 1950s and 60s Catalina and Sea Otter amphibious aircraft provided a regular air service to Kikori. By the time they became obsolete the airstrip was in-place to receive conventional aircraft. However, it used to be closed regularly because of the wet conditions. In the early 70s some of the marsden matting salvaged from an old Jackson’s runway, to make way for upgrading to 747 Jumbo standard, was shipped to Kikori to be laid and so provide an all-weather-’strip.

Until last year there were often three or four flights a day connecting Kikori with all Gulf stations east to Moresby and, once or twice a week to and from Balimo and Daru to the west. There were also occasional flights to and from Highlands’ centres such as Mendi, Hagen and Goroka.

Late last year an Airlines PNG (APNG) Twin Otter ran off the side of the ’strip whilst attempting take-off. Despite the fact pilot error may have been the cause APNG ceased flying into Kikori, claiming that the route was uneconomical and the ‘strip unsafe. For a while Hevilift flew into the town, two or three times a week, subject to loading. However, it too has since cancelled its service.

It is sometimes possible to hire one of the few other very small charter-operators’ aircraft to fly into Kikori for an inflated price but, since November 2010, there are no more RPTs (scheduled passenger services).

The marsden matting is lifting due to lack of maintenance and more than one aircraft has suffered tyre-damage, even a puncture. My access on two visits this year has been by way of Air Niugini to Mount Hagen, thence by chartered aircraft to a private logging airstrip on the Sirebi River bank. This ‘strip too is unreliable, often submerged during the wet season. From there it is then an hour by outboard motor to Kikori – longer against the flow on the return upstream journey. Such trips will consume 25 liters of fuel an hour using a 40HP motor.

In mid-2011 zoom (outboard motor fuel) cost K30 a gallon ($3.35 a litre) at the two trade stores in Kikori and the cost rises as one proceeds upstream. Village trade stores near Middletown, if they have any available, charge K35 a gallon ($3.90 a liter). At the Samberigi shanty-squatter-settlements around the Kaiam crossing the asking price is K50 a gallon ($5.55 per litre).

The oil and gas companies don’t give a hoot – they have their own private ’strip at Gobe, halfway between Kikori and Kutubu. From there workers are ’choppered to Kopi and various construction camps.

Were one able to secure a seat on a charter-flight from Moresby to Kikori (or return), it will cost K850 ($355) each way. One-way fares from the logging camp cost K980 and from Gobe K1200. At the time of writing Virgin Australia was offering Sydney-Port Moresby fares for $329!

The Kikori town roads (a couple of kilometers connecting the airstrip to town and High School) are a mess. The road to Kopi and beyond (constructed because of the oil pipeline) is often flooded during the wet season. All it serves to do is give easier access for Southern Highlanders (mainly from Samberigi, near where it terminates) to expand into the Gulf Province and claim land-rights.

There is no regular shipping to Kikori. Vessels owned and operated by the two local trade stores service their own needs.

Despite appalling communications (air, sea and land transport-wise) and a tenuous supply chain, a Government Secondary School (Grades 9 and 10) and a mission-run hospital manage to operate.

So, what else has the 21st Century and a multi-billion dollar project brought to Kikori?

Well, no thanks to Government’s Telekom and its BMobile service (which is not available outside major centres), but thanks to private enterprise, nearly everyone seems to have a mobile ’phone! This is courtesy of the Irish company Digicel which is revolutionizing rural telecommunications throughout PNG.

At least Kikori remains relatively peaceful. This is not so in the SHP, especially closer to Hides. The effects of modern mobile telephones on tribal fighting, and landowner-dealings with government and developers are another story!

Exxon/Mobil’s patience and endurance will be tested over the next three years of construction and even more so over the several decades of production should the project succeed! If it does succeed PNG will have a world-class gas export system, at no cost to its government coffers, but returning hundreds of millions in taxes, royalties and other benefits each year. However, judged on past resource developments it will not benefit the rural dwellers. They seemed doomed to remain locked into the near-subsistence economy of their grandparents.

But the cost in PNG lives may well eventually number in the hundreds as landownership disputes escalate. This will be especially so if current plans by politicians for the State to divest itself of the ownership of minerals and petroleum resources and vest such ownership with the so-called landowners is approved by Parliament.


Attachments:
File comment: LNG map
KIKORI LNG MAP.jpg
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File comment: LNG detail
KIKORI LNG DETAIL.jpg
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File comment: Eastern two thirds of ’strip from parking bay turn-off area. Note uncut grass on each side of the marsden matting covered centre ’strip runway area.
IMG_0209.jpg
IMG_0209.jpg [ 132.57 KiB | Viewed 9992 times ]
File comment: Western one third of ’strip – note how pedestrian traffic from parking bay crossing to southern side has created a ‘step’ from the marsden matting middle section.
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File comment: Western end.
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IMG_0211.jpg [ 96.78 KiB | Viewed 9992 times ]
File comment: A section of old limestone surface material breaking through marsden matting due to erosion.
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File comment: Lifting marsden matting – a danger to tyres.
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File comment: as above
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File comment: Pedestrian traffic from parking bay (north side) which creates problem shown in IMG 210 on south side of narrow marsden matting covered centre-runway area.
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File comment: Looking east towards Kikori River and Aird Hills – note long grass.
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File comment: Aerial view to East. Note narrow centre ’strip of marsden matting and long grass on sides of ’strip. Note how puddles, lack of marker cones (and no windsocks) combined with lifting marsden matting and erosion as above make it a most hazardous landing area!
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IMG_0230.jpg [ 131.72 KiB | Viewed 9992 times ]
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PostPosted: Thu Dec 08, 2011 11:07 am 
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Joined: Tue Feb 04, 2003 1:06 pm
Posts: 347
Location: Brisbane, Australia
DOSS: 08 Nov 1965
proksi man wrote:
Exxon/Mobil’s patience and endurance will be tested over the next three years of construction and even more so over the several decades of production should the project succeed! If it does succeed PNG will have a world-class gas export system, at no cost to its government coffers, but returning hundreds of millions in taxes, royalties and other benefits each year. However, judged on past resource developments it will not benefit the rural dwellers. They seemed doomed to remain locked into the near-subsistence economy of their grandparents.

This is the shame of it, with the billions paid by way of taxes, royalties etc. at the national level and despite all the sticky fingers along the money trail, you would think that surely some of it or just a skerrick or a modicum must reach the village level but as Chris has stated, it really doesn't however there is no point us foreigners beating ourselves up about this, this is a problem that PNG must overcome.

Peter.

_________________
Wonenara, Chuave, Sinasina, Kundiawa, Buin, Boku, Kieta, Waigani

He who has the gold does make the rules and that darwinian selfish gene (ISBN 0-19-929115-2) will ensure that the meek will not inherit the earth.


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PostPosted: Thu Dec 08, 2011 9:58 pm 
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Joined: Tue Apr 24, 2007 9:47 pm
Posts: 57
Location: McLaren Vale
DOSS: 18 Jul 1969
I served as an APO at Kerema, Kikori, Baimuru and Omati from mid 1969 to mid 1971. During this time, there were regular flights to Kikori and Baimuru, mainly by TAA Twin Otters or TAL Britten Norman Islanders. Both strips were well maintained with, frankly, not a great deal of effort beyond keeping grass mown and carrying out minor repairs. It seems that Baimuru's strip is now completely unusable and that of Kikori is going the same way. As I recall, the Australian Petroleum Company found as good deal of natural gas in the Gulf District but, because it was then not commercially viable to exploit it, simply capped the wells and left them to be reclaimed by the jungle.

In 1970, I participated in a hydrological survey of the Pai'a Inlet (sometimes called Port Romilly?) which confirmed that very large vessels could safely enter its waters. The idea was that, one day, it would become the hub of a great gas project. It now seems that this will not occur and that, consequently, the very deprived residents of the area will be essentially left to rot in the vast sago swamp that is the ancestral home of most of them.

It is hard to not be despondent in the face of so much evidence that successive PNG government's have squandered huge sums on who knows what and left the majority of the people in abject poverty. I guess most of us feared that this might happen but it brings no satisfaction to see one's worst fears realised.

Despite being a supposed "horror' posting, I really enjoyed being in the Gulf which, despite the humidity, rain, mud, crocodiles and sometimes awful living conditions, was and remains an environment of exceptional diversity and interest. You haven't lived if you have not been stranded for hours in a sago swamp at low tide or flooded by a Guba which manages to hit your motorised canoe at the worst possible moment or gone water ski-ing under the watchful eyes of a few dozen salties!

Regards to all,


Chris Overland

(Kiap, 1969 to 1974 - Kerema, Baimuru, Kikori, Omati, Koroba, Kagua, Popondetta & Kokoda)

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Chris Overland
(Kerema, Kikori, Baimuru, Koroba, Kagua, Popondetta & Kokoda)


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