13 Jul 2012

LNG project not expected to impact PNG economy significantly in short to medium term

5:16 pm on 13 July 2012

Papua New Guinea's Treasury Department says the proceeds from Exxon Mobil's liquefied natural gas project will not impact the economy significantly in the short to medium term.

According to Treasury, the economy will continue to grow between 2013 and 2016 but not in the leaps and bounds fashion many predict for when the project starts production in 2014.

The newspaper, The National, reports that total revenue is projected to grow from 4.2 billion US dollars next year to 5.6 billion dollars in 2016.

While recurrent expenditure is projected to grow by 500 million US dollars a year from three billion next year to 4.5 billion three years later, development expenditure is forecast to stagnate over the period.

The Treasury says the first wave of LNG dividends expected in 2015 are only sufficient to replace trevenues from the Ok Tedi mine and depleted oil fields.

PNG is expected to still depend on grants of about 600 million US dollars over the next three years.