Oil Search JV Inks PNG Power Purchase Agreement

NiuPower, a company jointly owned by Oil Search Power Holdings and Kumul Energy, has signed a long-term power purchase agreement with state-owned PNG Power, Australia-listed Oil Search said April 28.

According to Oil Search the agreement will support the electrification and development of Papua New Guinea using the country’s own natural gas. The NiuPower Port Moresby power station located near the PNG LNG project plant site is the country’s first dedicated grid-connected gas-fired power plant.

“Given that the PNG LNG project is exporting significant volumes of gas to power Asia, we believe it is important for us to help find solutions for PNG’s power dilemma. The signing of the power purchase agreement demonstrates our commitment. Additionally, partnerships between the private sector and the PNG government like NiuPower will help ensure we address some of the most significant development and social issues for people in PNG,” Gerea Aopi, Oil Search PNG country chairman, said.

NiuPower was established in 2017 to facilitate joint participation between Oil Search and PNG state-owned Kumul Petroleum Holdings to focus on domestic power production. The Port Moresby power station is NiuPower’s initial investment at a cost of US$100mn. Using locally produced gas instead of imported heavy fuel oil and diesel, it will reduce materially the environmental impact from power generation, Oil Search said.

Development of the power station commenced in August 2017 and is owned and operated by NiuPower as an independent power producer. The power station will have the capacity to supply up to 58MW of electricity to the Port Moresby grid.