September 28, 2010 / 2:07 AM / 9 years ago

Exxon Mobil's LNG project in PNG attacked -media

PERTH, Sept 28 (Reuters) - Villagers in Papua New Guinea attacked Exxon Mobil’s liquefied natural gas project late last week, burning heavy machinery and using high-powered weapons to damage construction equipment, a newspaper reported.

The attack took place on Friday night at Kaiam, Papua New Guinea, near the project’s Kopi LNG facility, Papua New Guinea’s The National paper reported.

The attacks were part of ongoing land disputes within the footprint of the $15 billion PNG LNG project.

Residents of the area have been frustrated by what they see as their exclusion from participating in the initial stages of construction of PNG LNG’s 6.6 million tonne per year processing plant that began earlier this year, the paper said.

No one was wounded in the attacks, which took place at the worksite of Australia-based Clough Curtain joint venture, according to the paper.

Media reports have suggested that the project could be delayed due to landowner disputes with the government.

Exxon Mobil officials could not immediately be reached for comment.

At a conference in Singapore last week, Papua New Guinea’s minister of planning and development, Paul Tiensten, said there was “infighting” among the landowners affected by the project, but said the project was still expected to stay within the original cost estimate and start exporting LNG in 2014.

Tiensten said some of the approximately 60,000 landowners affected by the project question the division of benefits from the project.

LNG benefit-sharing negotiations late last year resulted in violence in Port Moresby and earlier this year, a fatal gunbattle erupted between tribal groups arguing over a share of the project.

The Papua New Guinea government holds equity in the project, while Exxon Mobil (XOM.N) is the majority stakeholder. Other equity holders include Oil Search (OSH.AX), Santos (STO.AX), and Japan’s Nippon.

PNG LNG has long-term supply agreements with China’s Sinopec (0386.HK), Japan’s TEPCO (9501.T) and Osaka Gas (9532.T), and Taiwan’s CPC.

Reporting by Rebekah Kebede, Editing by Ed Davies

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