MY FAVORITE DEVELOPMENT PROJECT

I found the following this morning on the Pacific Islands Report:

"TOKYO UTILITY TO BUY HALF OF PNG GAS OUTPUT
20-year deal pegged at $100 billion

PORT MORESBY, Papua New Guinea (PNG Post-Courier, March 31, 2010) - The Prime Minister Grand Chief Sir Michael Somare met his counterpart Prime Minister Yukio Hatoyama in Tokyo last night.

Prime Minister Somare is currently in Japan on an official working visit and held bilateral discussions with Prime Minister Hatoyama as well as officiating at the opening of the new PNG Chancery and inaugurating the second Air Niugini flight to Narita.

The two leaders covered various areas in their discussion including PNG liquid natural gas (LNG) projects, trade, investment and economic relations, environment and climate change and international co-operation.

Sir Michael said relations between the two countries were reaching new heights spurred by Japanese interest in the gas commercialization program.

"As you know in December last year, my country achieved the Final Investment Decision on our first LNG project," he said.

Sir Michael told his counterpart that as a direct result of this project, PNG would experience rapid development that would transform the lives of Papua new Guineans and provide greater co-operation in the fields of economy, energy and environment for Japan. He said Tokyo Electric Power Company and Osaka Gas would buy more than 50 per cent of PNG’s LNG export and make PNG one of the largest "Clean Energy" suppliers to Japan over a 20 year period at the value of US$100 billion. On environment and climate Change, Sir Michael said the partnership between the two countries would deliver clean energy through the LNG Project and was consistent with their strong support for the Kyoto Protocol and the Copenhagen Accord.

Sir Michael said that Japan continued to provide support to developing countries under the Hatoyama initiative with $US15 billion over the next three years towards adaptation of mitigation of the effects of climate change."

I have believed for more than fifteen years that the best way for the FSM to develop is to build an LNG (Liquified Natural Gas) depot in the FSM, and to convert all power plants in the FSM to operate on LNG. This would reduce or eliminate diesel fuel, which is much less efficient and much dirtier, as a fuel source for power generation. In addition, automobiles can be converted to run on LNG, which is much more efficient, and cleaner, than gasoline.

I have always felt that the best way to develop the Faichuuk region of Chuuk State would be to build a decent wharf in Tol, and an LNG tank farm there. The LNG could be stored in the tank farm, and ships could carry the LNG to the other states of the FSM.

If Japan can agree to pay $5 BILLION per year for twenty years to Papua New Guinea for 50% of its LNG output, maybe it is time for the FSM to dream BIG, and begin discussions with Japan (and the US), about the possibility of developing LNG capacity in the FSM. Since the LNG will be carried by ships from PNG to Japan, it should not be too hard to drop some off from time to time at a new LNG tank farm in Chuuk State!

Big projects begin with big dreams!

Comments

  • edited April 2010
    Sarem Chuuk

    I do recall reading portion of your infrastructure recommendation. This LNG issue, if ever considered for our nation, would require a multilateral negotiation among U.S, Japan, FSM and PNG. I suspect that maintenance cost efficiency and safety concerns would be at the forefront among all other anticipated issues concerning the storage and transportation of LNG throughout the FSM. The usage of LNG, although presently accounts for a very minimal percentage of the global gas consumtion, is and will continue to be on the rise in demmand. And you are right- big projects begin with big dream.
  • Saka:

    Of course you are correct on all points, and the negotiations would have to deal with the cost of construction of the port facilities and LNG tank farm especially.

    On the transportation through the FSM issue, unless I read my map incorrectly, the LNG from Papua New Guinea will have to pass through the territorial waters of the FSM anyway. From my look at the map, PNG appears to lie almost directly south of the Chuuk lagoon. Ships transporting LNG to Japan, which lies almost directly NORTH of the FSM, will most likely take the most direct route.
  • Sarem Chuuk,

    Do we have the natural resources? and what map are you looking at? PNG directly south of Chuuk?

    Thanks,
    Reco
  • sneakyreco:

    If you mean by natural resources the raw materials necessary to build the holding tanks for natural gas, the answer is no. But there is enough land in Faichuuk to build a tank farm, just as there is enough land in Weno to build a tank farm for diesel fuel and gasoline. The materials necessary for the tank farm would have to be imported, just as most of the materials for the road in Weno have to be imported, which is why a port and wharf in Tol become necessary.

    As always, the biggest question regarding the possibility of a tank farm is what the landowners will demand for the land. If they demand millions, then nothing will get done (the current state of affairs). However, if they demand a smaller up front payment and annual lease payments based on revenues of the tank farm, I am fairly certain the negotiations could prove fruitful.

    I have a map of the nations of the western pacific which shows New Guinea virtually south of the Chuuk Lagoon. But to make sure, I checked the longitudes of Chuuk and Port Moresby in PGN on Google. The longitude of Chuuk is 152 degrees east longitude. The longitude of Port Moresby is 147 degrees east longitude. The distance represented by a degree of longitude at the Equator is +/- 70 miles, making the variance from true north south of Chuuk and Port Moresby +/- 350 miles. As they say, that seems close enough for government work.
  • Don't you guys have eminent domain over there?
  • States delegates eminent domain power to certain public and private companies, typically utilities, such as that they can bring eminent domain actions to run telephones, power, water or gasoline. Whether Chuuk has eminent domain or not beyond my knowledge. Have not been to Chuuk for ages. All I know is eminent domain in chuuk is almost like: you pay me up front b4 bringing your power lines, gas lines or telephone poles on my property or a spark of Mechete on your skull. Or even finippins
  • Chuuk State has eminent domain in its Constitution and in its statutes. It refuses to use it, however, preferring to pay ten times what land is worth to landowners in return for promises to have the clan vote for the governor and members of the legislature who approved the payment at the next election.

    The sad thing is that Chuuk will never develop until it reforms its land tenure issues. It will not do this because it is too profitable for the landowners (and for the politicians who remain in office) the way it is.

    So much for big dreams.
  • That's why I never dream to go back to my home island of Chuuk. I'm happy where I am, even though I live on pay check to pay check. I would really love to go back home and live there...ita pwata usap mojen, nge ngang chon Chuuk, ai tong mi senap, non fansoun nangatam, ai ria ngeni chuuk epwe chok soposop tori manawei epwe much me won fonufan. Anean pwe fan ew, kot epwe nengeni Chuuk, awora an tong me umoumoch, epwe sanani chuuk o tongei chuuk anisi kich meinisin pwe sipwe pwapwa me tong tipe-1 usun chok i ewe kot mi unusen tipe mecheres me tong ennet. Ne anowas annim ngonuk en Sarem Chuuk pwan fiti om family me chiechiom, ei sio ngaw a katou seni onowe/niewe kan Idefongcy non an unusen tong fochofoch.
  • Sarem Chuuk,

    Chuuk State should clearly identify to the people what the government should do, can do, and must do. The state should have the community first before individuals before it can take another step towards development. SM, you are ambitious. You are very optimistic. You should lead the way for us!

    Reco
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