Landowner protest threatens to shutter gas supply to ExxonMobil's PNG project

Global petroleum giant ExxonMobil on Thursday called for a prompt settlement of grievances between the Papua New Guinea government and aggrieved landowners, after protestors took control of a conditioning plant supplying its multi-billion-dollar LNG project.

Landowners in Papua New Guinea's Hela Province have taken control of the key asset partially supplying the 19-billion-U.S. dollar PNG LNG project, demanding government authorities to pay over 2 billion Kina (631,000 U.S. dollars) owed royalties currently held in trust.

The agreement with the landowners in 2009 sets aside a 2 percent royalty held in trust by the central bank until land claims can be assessed, however that process has not been completed.

ExxonMobil on Thursday said their facilities were continuing to operate, though they are closely monitoring the peaceful protest.

"We respect the right of individuals to peacefully protest, but we also encourage continued dialogue between landowners and the government to resolve their outstanding issues promptly," a company spokesperson told Xinhua in a statement.

"We are committed to maintaining a positive relationship with landowners, the government and the wider community."

Stanly Mamu from PNG blog LNG Watch told Xinhua that authorities have until Friday to come up with a credible plan that addresses their grievances after initial consolations on Wednesday.

"If the government cannot give a positive response on their petition, then tomorrow the landowners will close down the wellheads" that supply gas to the project, Mamu said via phone from Port Moresby.

Local media reported authorities have deployed additional police into the restive highlands should the protestors shutter operations, but the landowners have vowed to fight what they feel is legally theirs.

"If the police are deployed to the project area and trying to force the people to open the (conditioning plant's) gate, then the landowners are saying then it would be another Bougainville," Mamu said.

In 1988, the now autonomous region of Bougainville erupted into a decade-long civil war, killing almost 20,000 people, following the failure of the central government to share royalties and stop environmental degradation from Rio Tinto Ltd's Panguna gold and copper mine.

New Zealand-led peace talks in 1997 ended the conflict after it was found the then Papua New Guinean government had sought international mercenaries to regain control of the resource rich island.

Under the peace agreement establishing the autonomous region, Bougainville will hold a referendum of independence by 2020.

Xinhua's calls for comment from PNG Minister for Petroleum and Energy Nixon Duban went unanswered. Endit