On shaky ground: PNG LNG and the consequences of development failure

Natural gas Sustainable development Corporate social responsibility Papua New Guinea

This reports investigates the impacts of Australian-backed, Exxon-led PNG LNG project on the local affected communities. Commencing production in 2014, the project extracts gas, condensate and naphtha from PNG’s Highlands and ships these products to a liquefaction plant near Port Moresby by means of a purpose-built pipeline.

Communities identified as part of the Project Impact Area numbered 34,000 people, composed of several different ethnic groups, and spread across around 117 villages. Most of them are located in the highlands province of Hela, and the vast majority are ethnically Huli.

This report is the second in a series of reports exploring the PNG LNG project. It follows the release last month of Double or Nothing, a report about the impacts of PNG LNG on the national economy of PNG.

Summary of findings:

  • Although some royalties have been paid to communities near the LNG plant, no royalties have yet been paid to Hela communities.
  • The landowners of the resource in the areas of Hela Province are still living in conditions of abject poverty.
  • Despite warnings about the dangers of starting production before the completion of landowner identification and vetting, the companies proceeded into production phase before this was complete.
  • The majority of the promised infrastructure and services has not been delivered.
  • For the past two years, there has been a series of incidents of violence, sabotage and kidnapping that are clearly connected with frustrations and discontent about the project. Since August 2016, the violence has escalated in the Hela communities.
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