How Puma Energy services Papua New Guinea’s energy market

Welcome,

Since 2014, Puma Energy has been Papua New Guinea’s major refiner and retailer of petroleum products. It’s also part of a global energy operation that spans 47 countries. Jim Collings, Country General Manager, explains some of the challenges of supplying a country which is still heavily reliant on diesel fuel.

Puma Energy’s Napa Napa refinery. Credit: BAI

Puma’s parent, Trafigura, is an energy trader. This shapes its country strategy, explains Puma’s General Manager in PNG, Jim Collings.

Puma Energy’s Jim Collings. Source: EMTV


‘The Puma business model tends to focus on locations where we can support that commodity trading and also take a step towards working within the supply chain all the way from activities in the commodities to the midstream and downstream parts of the business,’ he says.

‘Where the PNG business came into play was as a resource-rich country looking to manage both its internal energy needs and international export growth.

‘It also fits our model of being in a developing state, whereby we know we can go in and add value with our expertise in logistics and supply chain management.

‘Puma Energy purchased the midstream and downstream assets of InterOil.’

‘What we tend to do is look at assets that we can purchase and then add value to, through further investment in physical infrastructure, implementing world class process and systems, and heavy investment in people development.’

Assets

Puma Energy purchased the midstream and downstream assets of InterOil, including the Napa Napa oil refinery near Port Moresby and a chain of petrol stations, in 2014. InterOil had previously picked up the PNG assets of Shell and BP.

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‘From our refinery here, we distribute it into 22 different terminals and depots around the country.’

‘It was a relatively small, strongly diesel-led, refinery: 34,00 barrels a day. That suits the market here because it is a diesel market.

‘We have the ability to supply the majority of the products for the country.’

Collings says the company employs about 650 people directly. ‘For every person employed there is somewhere between five and 10 more jobs created via contractors or in the community directly.’

Distribution

Collings says the logistical challenges are often very challenging and of a very diverse nature.

‘From our refinery here, we distribute into 22 different terminals and depots around the country—on the mainland and scattered islands. They are a combination of coastal and also inland depots. Those logistics we support through two coastal shipping vessels.

‘Also, we have a range of inland logistics. We truck product up from Lae through to Goroka and into Mt Hagen and the Highlands.

‘In other locations like Tabubil you deal with constant rainfall up to 10 metres per annum.’

‘That particular logistics exercise takes up to 24 hours to travel the round trip of somewhere in the order of 350 kilometres each way. The highway regularly floods and this makes the journey even longer.

‘In other locations, like Tabubil, you deal with constant rainfall up to 10 metres per annum, whereas Rabaul on New Britain Island is volcano and earthquake territory.’

Complexity

A Puma service station in Port Moresby.

Collings says PNG ranks in the ‘top five more complicated territories’ in which the company operates. But he says it is also in the top five countries in terms of scale.

‘It is an expensive place to play and in the fuel industry margins are very slim. It is tough but a positive investment for us.

‘We continue to invest; we have invested over and above our initial investment in purchasing the business.

‘We have put US$180 million into improving the safety elements around the business, including new wharves and jetties; upgrading the refinery; getting new tanks; and increasing the capability of the business through better logistics management.’

Economy

Collings tells Business Advantage PNG the general performance of PNG’s economy is critical to Puma’s business.

‘The structure of the economy, from our perspective, is that you have two or three large mining operations: Ok Tedi, Harmony and Lihir as examples, which drive volume uptake.

‘With commodity prices having recovered somewhat, they have increased their production, which drives volume for our business.

‘The second area comes from very strong agricultural performances from companies like New Britain Palm Oil, Ramu Agri and the coffee producers. All high quality and critical exporters.

‘The investment over the coming years in the network for power supply will continue to improve.’

‘The third area is power generation. The PNG Power network is going through its own development and there is a large amount of product we produce which is going into power generation in one way or another.

‘The investment over the coming years in the network for power supply will continue to improve and that will improve reliability. That unleashes a whole level of productivity, which is good for us as well.

The fourth tier is around the general transport, from shipping to land-based transport.’

Threats

Collings says the company’s biggest challenge currently is managing currency flows.

‘It is a big issue for the country. There is a structural deficit,’ he observes.

‘Part of that is to do with the structures around the LNG financing. I know the government is working very hard to manage the new arrangements that will come with new investment into the country.

‘Timing is a part of the problem because it takes a while for them to get into a position where the appropriate royalties come in.

‘But we are seeing that, within the next 18 months, we should be in a better place for the country and we will start to see more investments coming in as well.’

Comments

  1. Michael Ben-Gemel Winuan says

    I am ending my contract with the PNG University of Technology at the end of November, this year, 2019. And when I go home, I have planned to go into a service station business, but if possible with Puma Energy, to go into it in a joint-venture operation with Puma Energy. Please, consider and advise me if this can be possible. I live on an oil palm state lease block along the Kimbe-Bialla (New Britain Highway) Highway (close to Kimbe), with a high volume of traffic.

    I look forward to your feedback.

  2. Darryl Bell says

    I am from Aitape. I am very interested in setting up a Puma service station. My email. darrylbell1979@gmail.com

  3. Nathalie Gideon says

    Need to put at list 2 Zoom pump for boats travelling in and out of Finschaffen, who can I told to, am interested to be a distributing of your product.

  4. Arnel Dianopra says

    I have a friend who is looking for a supplier of diesel fuel. You can get in touch if you are interested. arnel.dianopra@gmail.com.

  5. Kevin Niaka says

    Very interesting. I have a company currently operating in Buka and Buin in the Autonomous Region of Bougainville and now we focus on to expand the Business by establishing fuel service station. Please contact and advise to become your future business partner.

  6. Siuri Nimoi says

    Iam interested to start a fuel service in Suki Western Province.Please email me to
    siurinimoi94@gmail.com.

  7. Elvie Penelen says

    I am intending to operate a fuel station at East Cape (Milne Bay Province) Please email me contact details of the person in charge I can see to discuss further.

  8. TvengkoFFa N Timah says

    I am interested in setting up a fuel station in western province area along kiunga to Tabubil highway land is not an issue as it is located in a strategic location..email me for further advice.

  9. Kevin Aisi says

    I’m in the process of establishing fuel station in Bereina Districts on the main Hiritano Highway selling all fuel drums I need your help to start my fuel business . Could you email me on this address for further discussion.
    Many thanks,

  10. Manase Songai says

    My family is going into fuel distribution business in Sandaun Province. It was already agreed with camp managers for all logging companies operating there and currently we had started off with 20 drums.
    Therefore, am just seeking advise on any possible way we can liaise with Puma Energy to expand what we’ve already started?
    Appreciate your feedback.

    Regards,
    Manase Songai

  11. Maureen Kaisur says

    Who can I contact regarding the services station.
    I want to set up in Manus ..

  12. Edward Timan says

    I am interested in setting up a fuel service station in Kavieng town and in Namatanai town in New Ireland Province. Land will not be an issue as I own the properties in the indicated areas. I need this to start very soon. Who do I speak to. Please contact me ASAP. I can be contacted at e.timan@icloud.com

  13. Destin Wangar says

    I am interested to partner with Puma Energy to setup a Completed Fuel Service Station near Watarais of Markham to Supply the Highlands Highway and most importantly supply the Ramu2 Hydro Project. I have a land that is suitable to for the setup. Land shouldnt be an issue in this areangement.

    I am also the Consultant to Ramu2 Hydro Project Landowners Company and arrangement for supplying fuel to the K1.8b project hydro shouldnt be an issue.

    For further information please dont hesitate to contact me on 70881856 or email dwmarapau@gmail.com

    Cheers

    Destin Wangar
    Consultant/Economist Ramu2 Hydro Project LOC

  14. Pamela Quininge says

    How does the laboratory in lae operates?

  15. Munun Seaman Services says

    I am interested in starting a floating and land fuel station with the puma energy here in Simber Island New Ireland please do contact me on my email.

  16. Leeanne Aihi says

    I have a family who wants to restart their Service Station Business. Whom in Puma Energy do I see or make appointments with.

    Thank you

  17. If Puma Energy Company is looking at expanding its business further then I am ready to partner with the company to bring their petroleum products to Popondetta, Oro Province. There is only one petroleum company currently operating there and cost are very high so it will be good Puma venture into the area.
    I have land and it is at the fringe of the township, which is good for set up a service station to provide much need service to business houses and locals at large.
    contact me on : willie.lape@postpng.com.pg

  18. Donald Simatab says

    I am also interested in setting up a service station in East New Britain Province.
    Please contact me on my email donald.simatab@hotmail.com

  19. Gabriel Mareg Yanasa says

    Our Lihirian company Anios Aniot Project Partners Ltd is a landowner entity operating in the Lihir Gold Project in PNG.
    The company is currently in need of a fuel supplier that can supply diesel fuel, heavy oil fuel plus lubricants to to the Lihir Gold Project. Diesel fuel alone average monthly usage is 200 million cubic ltrs. We are desperate for Puma Energy PNG assistance for the opportunity thru a business partnership to supply 50 to 200 million cubic ltrs of diesel fuel monthly.
    Please contact us for full details regarding this opportunity should your management be willing to take this offer with us instead of selling this opportunity overseas.

    Looking forward for Puma Energy favorable response.

    Gabriel M Yanasa
    LIHIR

  20. Jerry Rekso says

    I’m in the process of establishing fuel station in kundiawa town. Could you email me on this address for further discussion.
    Many thanks,
    jpamundi@gmail.com

  21. Emmanuel silata says

    I want to set up service station+ distribution to all png power station and recipient of service.. Would please help me with information..

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