The governor of the bank of Papua New Guinea (BPNG), Loi Bakani has warned the government and other stakeholders involved in the LNG project not to raise too much expectations about windfall revenue inflows in the first year of production.
The warning was issued in the Bank’s quarterly economic bulletin.
“Export receipts and revenue for the Government may be minimal and therefore expectations of windfall revenue and any associated appreciation of the kina might not materialize in the near term.
“With the completion of the construction phase of the LNG project, the government should co-ordinate its efforts and priorities towards utilizing the labour and capital that are released from the project.
“In addition, the government should continue to develop the agriculture sector and invest in vital infrastructure projects in order to enhance the productive capacity of the economy.
“A diversified agriculture sector, including downstream processing, can broaden the export base and build PNG’s resilience to withstand external shocks by lowering instability in export earnings”, Bakani said.
The developer of the project, ExxonMobil PNG Ltd announced last week that the $US19 billion (K52 billion) gas project was ahead of schedule with first shipment of LNG to the Asian markets in the coming weeks.