State utility PNG Power has been authorised to start negotiations with Hong Kong-based liquefied gas and power company, Energy World Corporation, to build a new 30MW-to-80MW diesel and gas-fuelled power plant in Port Moresby.

PNG Forest Products’ power plant in Morobe Province. Credit: PNGFP

Negotiations were announced by Public Enterprises Mininster Ben Micah last week in National Parliament. According to John Tangit, Acting Chief Executive Officer of PNG Power, approval of the deal is subject to a ‘due diligence checklist’ which will involve inspection of some of Energy World’s other power installations around the world.

Energy World taking over PNG Power’s existing Moitaka Plant is not currently a subject of negotiation, as some reports have suggested.

Tangit also told Business Advantage PNG that any final deal is likely to be between Energy World and the Independent Public Business Corporation, rather than with PNG Power.

‘We want to avoid a conflict of interest and be free to negotiate a good price,’ he said.

Meanwhile, the bidding process to find a private company to build and run a similar 30MW-to-50MW power plant for Lae ends on 31 May.

The Moresby and Lae bids follow recent smaller power purchase agreements with plants built and run by PNG Forest Products Limited and New Britain Palm Oil Limited (NBPOL).

At the same time, PNG Power has confirmed that a long-standing deal with Korean-owned Hanjung Power Ltd, whose Kanudi desiel power station has been selling electricity to PNG Power in Port Moresby since 1999, is being re-negotiated.

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