Papua LNG expected to drive development of Special Economic Zone in Gulf Province


A fifteen-year plan to develop the Ihu Special Economic Zone is expected to be approved this month. Driving its development will be the infrastructure requirements for Papua New Guinea’s second liquefied natural gas project—Papua LNG.

Ihu Special Economic Zone (ISEZ). Credit: Office of Member for Kikori Open Electorate

Centered on the Kikori district of Gulf Province, the Ihu Special Economic Zone (ISEZ) will consist of a free trade zone, petroleum park, industrial zone, technology park, forestry park, marine park, a deep sea port and airport, a township with hotels and resorts, and a government and administration area, Peter KenGemar, the ISEZ Project Director tells Business Advantage PNG.

‘We are awaiting an announcement about the construction date of the proposed Papua LNG project,’ says KenGemar.

‘It will mean we can go ahead with developing infrastructure for the project, including a road network link to Kerema [Gulf Province’s capital], wharfs and jetties, a township development, an airstrip and a clean water and power supply.’

‘We estimate the ISEZ will create up to 25,000 jobs when it is fully operational and another 25,000 jobs indirectly.’

According to KenGemar, the cost of Stage One is expected to be K5 billion, to be spread over five years.

‘But we estimate that revenue will be about K10 to K12 billion annually when Stage One is up and running.

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‘We estimate the ISEZ will create up to 25,000 jobs when it is fully operational and another 25,000 jobs indirectly.’

Gas industries

Peter KenGemar

Kikori District is one of 89 districts in PNG. It hosts 80 per cent (18 trillion cubic feet) of the discovered but undeveloped proven gas reserves in PNG. The planned ISEZ is ideally located for future development of PNG’s gas industries, including LNG, LPG, power generation and petrochemicals.

It currently hosts the Kutubu Oil export pipeline and offshore Kumul marine terminal.

Kikori will also be the base for the central processing facility for the country’s second LNG project, Papua LNG, and the planned offshore Twinza Oil’s Pasca Gas Condensate Project, the first of its type in the country.

A development application for the field has been submitted, with first production targeted for 2020. The field contains 19 million bbl of condensate and 20 million bbl of LPG. The propane component of the LPG will be sold into Papua New Guinea’s domestic market while the condensate, butane, and excess propane will be exported.

The liquids project is expected to have a 20-year lifespan with a development cost of US$350-550 million.

‘Revenue will be about K10 to K12 billion annually when Stage One is up and running.’


KenGemar said domestic and international air traffic passes over the ISEZ location. As well, a number of international shipping routes currently pass through the planned ISEZ locality.

‘The seaport and the airport have the potential to be major freight ports in the Pacific, because of their importance to the gas industries and associated export-driven industries, including agriculture, forestry, fisheries, mining and eco-tourism.’

The Minister for Commerce and Industry, Wera Mori, has stated that the PNG government wants to create four free trade zones around the country: the Pacific Maritime Industrial Zone (PMIZ) in Madang, the Sepik Plains special economic zone, the development of wharves in Kikori and Vanimo, and the Ihu Special Economic Zone (ISEZ).


  1. Brian Luru says

    We as a landowners of vailala wants the ISEZ officer to come down to the village and brief us the landowners good, because our concerns is that how can we benefits from this project ? And who are the beneficiaries?

  2. After 3 years, I am happy to say that we have progressed our project better, meeting more then one outcome. We will be presenting an update in next months Brisbane Conference: 15-16th August 2022

  3. Peter Kengemar says


    After 3 years we have made significant progress as a project under trying times due to Covid-19. We have opened airstrips that were shut down for 17 years- Ihu Airstrip, 15 years- Baimuru Airstrip and have connected Kerema via Petoi to Vailala by road and starting Vailala to Purari road construction just now.

    We as a small team working with Kikori District Development Authority have achieved a lot in the last 3 years. We believe in our strengths and the potentials and opportunities that lays ahead.

    As these two famous says;

    1. Rome was not built overnight
    2. The only constant is change

    There are many online articles, news and publications on the progress we have made. We have completed Phase 1 and moving to Phase 2 of the 4 phase 15 year program to develop Ihu SEZ.

    Attached are links that you can see the updates.

    “if we wait will the angels from heaven come down and develop our resources and our people?”


    Peter KenGemar
    Project Director
    Ihu Special Economic Zone Project Development Office.

    Links to more project information;

  4. John Hocknull says

    I saw this type of proposal in the 1960s and early 1970s and it was called a “CARGO CULT”. The population for this type of development would have to be in excess of that of Port Moresby and unfortunately the jealousies that this type of project will generate will cause more harm than good.
    Work with what you have in PNG by PNGeans and NOT Foreign investment that can turn tail and run at any time leaving you holding a broken promise. Look at Evergrande!!!!!!!

    • We have made significant progress with our project, we will be presenting our project update at next month; 15-16th August 2022 conference in Brisbane. You are welcome to attend, meet and greet, and you can express you expert professional view there. Cheers

  5. Joel Alvin says

    Very good Stanley great points, especially with number one point , where do the BLLG fits in, in terms of development in infrastructures and LLG itself , Antelope and the ELK are in Baimuru and not IHU, more awareness and consultations are to done before anything gets of the ground

    Over to you Mr Kengemar.

  6. Rex Larry says

    The plan is very ambitious.
    Have we been inclusive in our plans to carter for the equal participation of persons with disabilities.

  7. Rodney Kameata says

    Ideal project to improve service delivery, a Lot of work has to go into community engagements and dealing with landowner issues. I have worked in the area and well versed with issues in Ihu, Muro and Orokolo areas

    • Peter Kengemar says


      You are our expert in community engagements and landowner issues. We look forward to your expertise when we progress the work program forward.

      Thank you,

      Peter Kengemar
      ISEZ Project Director

  8. Tommy Lee, you can contact me at:

    Thank you for volunteering your services to this vision.

    • Sunny sawan says

      Whilst i appreciate Peter KenGerma for the graphics and brief video.
      Credit needs to be given to the guy who owns the blue print of the actual plan.
      Also appreciate the government for selling the idea.

      • Peter Kengemar says

        Sunny Sawan. To my knowledge there is no one else who proposed this idea. It is my brainchild to propose the Gulf Gas Hub in 2015 and ISEZ in 2017. Fullstop

  9. Tommy Lee says

    I personally think this is a good idea papa new guinea is is a beautiful country I enjoy it very much during my stay at Papua New Guinea I pray for God this project will successfully complete I live in New York I am real estate developer anything I can do to help I’m available I am retired now 917-837-7818 I would do it for free with all my knowledge connection with China and the US .Keep going make it happen

  10. Stanley says

    it’s very ambitious plan but as person that will be affected by this development I would like to raise a few points ;
    1.Where does Baimuru LLG feature in this scheme because Elk/Antelope is found in Baimuru not Ihu?
    2.what infrastructure development is planned for Purari pipeline corridor people and PRL15 to balance economic growth .in the affected LLGs
    3.How does this proposed development fit in overall development plan for Kikori electorate and Gulf province 20 year development plan? it is obviously not linked to Kikori and Baimuru sub- districts
    4.where are the road networks linking Kikori to Kerema as proposed by the National Government?
    5.the development should factor other existing development like Kumul terminal and pipeline , PNGLNG pipeline, proposed Paia inlet development and even Twanze and to integrate policies like economic corridors – There needs to be a wholistic approach to our development aspirations rather than piece meal – currently including this project
    6. The social responsibility of relocation of the population from coastal villages from Vailala West to Kaivakovu??
    7.Land Mobilisation – there are different ilgs or clans that will be affected – you cannot compulsorily aquire customary land period.
    8.Needs more consultation in spite of advance plan

    For your consumption

    • Hi Stanley, Your 8 points are insightful and should not be ignored. Any development coming to Gulf Province should factor in economic and social development for its people. Hence, collaborative effort should include all the stakeholders as mentioned in your list of significant deliberation. Hope, all parties come together to compromise with the goal of holistic development for the people of Gulf and the nation ultimately.

    • Peter Kengemar says

      Thank you Stanley and Lucy,

      All major resource development projects are anchored on the land. As such our phase 2 of the ISEZ project is Land mobilisation program which is addressing the concerns that you have raised.

      Very valid points. We all need to work together.

      Thank you,

      Peter Kengemar
      ISEZ Project Director

  11. Velepat Tuaru says

    We pray and hope real benefits will go to the whole community of Gulf as well as landowners in inkind development such as hospitals, schools, roads ,water and power supplies.

  12. Leva Pat says

    Great project – good for national growth and development.

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