A protest by a group of landowners has led to a suspension of work on Papua New Guinea's massive ExxonMobil PNG LNG project. ExxonMobil subsidiary Esso Highlands stated yesterday (15 March) that "work has been temporarily suspended" at the Hides Gas Conditional Plant site as a result of a landowner group undertaking what the company termed "illegal stop-work activities".

The local Post-Courier newspaper reported today that the interruptions commenced on 12 March. The paper quoted "landowners spokesperson" Henry Parilia as saying that the interruptions were "mainly to do with the government payout of IDGs [Infrastructure Development Grants] to the Hela Transitional Authority [HTA]". Parilia stated that the payments, which he says should have gone to his landowner group, had been "hijacked" by the HTA. The Hides site was originally located in Southern Highlands Province. However, it is part of the area that has been carved out of that province to create the new province of Hela, contributing to the confusion.

Significance: Two factors are at work here. One is a widespread confusion among landowners about the benefits that the LNG project will provide: the Asian Development Bank recently reported that Papua New Guinea is unlikely to experience significant earnings from the LNG project until around 2023. Even then it will take time for the benefits to trickle down to landowners. The second factor is competition between a diverse array of landowner groups, middle men, opportunists, local authorities, and provincial governments over the disbursement of monies relating to the project.

Earlier this month there was unrest in the capital Port Moresby after landowners demanding the payment of grants related to the project were told the money would be paid out in the provinces; suggesting that some of the protesters may not have been genuine claimants (seePapua New Guinea: 6 March 2012:). Further disruption to work on the project site is probable in the months and years ahead. Indeed it is most likely that the rate of disruption will increase as time passes and expectations remain unfulfilled.

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