Auma-Solutions for a world in motion
Field-proven solutions and services

Papua New Guinea’s hydropower development potential to be assessed

Fortescue Metals Group is to assess the feasibility of developing the hydropower potential of the island state of Papua New Guinea (PNG) to support sustainable industrial operations.

The West Australian-based iron ore miner announced on 1 September that it had entered into a Deed of Agreement with the PNG Government and its wholly owned corporation, Kumul Consolidated Holdings (KCH), to assess the feasibility of potential hydropower projects resources to support green industrial operations largely for export to global markets, and also for domestic consumption.

“Subject to the completion of feasibility studies and approvals, individual projects will be developed by Fortescue Future Industries with ownership and project finance sources to be separately secured without recourse to Fortescue,” the company said in a filing on the ASX, the Australian stock exchange. “Execution of studies and approach to capital investment will be consistent with Fortescue’s track record of developing multi-billion dollar projects, at an industry leading capital intensity”. No further details were disclosed by the metals group though PNG’s Minister for State Enterprises Sasindran Muthuvel, who signed the agreement on behalf of the Government at Parliament House in Port Moresby and mentioned that the projects on Fortescue’s radar, including the long-standing Purari river scheme, could eventually total 25 GW of installed capacity.

“After extensive investigations of PNG’s rivers and water resources, Fortescue has determined that there is great potential to generate sustainable energy for a series of environmentally friendly industries,” he said in a statement at the signing ceremony. “This is more than just a hydroelectric power scheme. This is enabling our country to become partners in the development of carbon-neutral industries that provide lots of employment, lots of investment opportunities and growth across the country, in industries that are normally built in countries like Australia and China”.

PNG’s Prime Minister James Marape urged local land owners and other stakeholders to engage openly with Fortescue. “We must look at these opportunities not simply as business deals, but as a new way to industrialize our country,” he said. “We have a chance to lead the world in environmentally sustainable industries that will create mass employment for our people, opportunities for future generations, value for impact communities, and a diversified revenue stream for local and national government,” he added. Mr Muthuvel, who led the PNG negotiations with Fortescue, said he was determined to make the deal stick and deliver results. “I will ensure that we actively progress major projects with Fortescue and that this is not just another agreement with intentions that never materialize or just harms PNG”s international reputation,” he said.

PNG Energy Developments (PNG EDL), a joint venture led by Australian energy group Origin Energy, had previously contracted a consortium led by AECOM, and including France’s EDF, Environmental Resources Management and Entura to evaluate the potential development of a hydropower project with a generating capacity in excess of 2000 MW on the Purari river, the third largest river in PNG, for domestic supply as well as for export to Australia via an undersea transmission cable.

Reliability beyond tomorrow
Reliability
Close