On the fuel shock, Papua LNG progress and strong super fund results

JGC and Hyundai E&C announced they will form a joint venture to construct an LNG production plant outside Port Moresby for the proposed Papua LNG project. The plant is expected to be built at the site of the existing ExxonMobil-led PNG LNG plant, pictured here. Credit: ExxonMobil

The United States and Israel’s war with Iran has set off “the largest supply disruption in the history of the global oil market,” according to the International Energy Authority (IEA).

The IEA has released a list of fuel-saving tips, which may be helpful if you have access to public transport, can work from home, don’t need to fly and can carpool but is less useful in a country like PNG, where diesel-powered gensets are essential and air travel is sometimes the only option.

With PNG’s limited options, “measures must be introduced urgently to reduce the consumption of fuel,” says the Asian Development Bank’s Country Director for PNG, Takafumi Kadono.

Indicative local petrol and diesel prices rose modestly in March, up three and five per cent respectively, but the Independent Consumer and Competition Commission has already flagged the rising oil price (crude oil is up 42 per cent so far this year) “will affect” prices this month. Brace yourselves for its next announcement, due on 8 April.

Assuming the crisis persists, Treasurer Ian Ling-Stuckey has flagged that a cut to fuel excise and an exemption from the GST for fuel may return. The first opportunity for these to be approved by Parliament would be in its next session, scheduled to start on 26 May.

Positive signs on Papua LNG

There are small and encouraging signs that the US$14 billion-plus TotalEnergies-led Papua LNG project is edging closer.

It has been announced that Japan’s JGC and Korea’s Hyundai E&C will form a joint venture to construct the electric LNG production plant for the project, to be based at ExxonMobil’s LNG plant in Central Province. According to a JGC statement, “the final EPC [engineering, procurement and construction] contract award and notice to proceed are expected to follow the project’s final investment decision, scheduled at some point in 2026.” JGC previously worked on the PNG LNG project.

Meanwhile, fencing work around Kerema’s town oval has been completed ahead of the construction of a new meeting hall to accommodate some of proceedings of the long-awaited Development Forum. The forum – a prerequisite for a project green light – will be divided between Kerema, the capital of Gulf Province, and Port Moresby.

At the same time, we understand TotalEnergies is currently verifying the details of local companies who have submitted their details to the project’s supplier portal.

Offshore investments boost super results

Their 2025 results are in and PNG’s superannuation funds have delivered for their members, achieving double-digit returns.

Last month, Nambawan Super and Nasfund both announced impressive annual crediting rates to their members of 12 per cent and 13 per cent respectively, while the smaller defence force retirement fund, Comrade Trustees Services Ltd, reported a similar result of 12.5 per cent.

The funds point to several factors behind the growth including, notably, the strong performance of local and international equities.

As Nasfund’s CEO Rajeev Sharma has observed, the improved availability of foreign exchange in the past year has enabled PNG’s super funds to invest more funds offshore, clearly with immediately impact.

In the case of Nambawan Super, 37 per cent of its returns came from its international investments, even though these represent just 25 per cent of its total portfolio.

Nasfund also reported a strong contribution from its offshore investments, which now make up 21.8 per cent of its portfolio.

In both cases, offshore returns were boosted thanks to the relative strength of the US dollar against the kina.