OBG talks to Dominic Avenell, Managing Director, Avenell Engineering Systems: Interview

Interview: Dominic Avenell

What potential is there for industrial parks in Papua New Guinea, especially in Port Moresby?

DOMINIC AVENELL: For a long time the concept of industrial parks meant an area of the city that was zoned for industrial use, whether for ports, refineries or other industrial projects, but the idea of combing residential segments is slowly gaining ground in PNG. One of the reasons is the prohibitive price of real estate in Port Moresby, but others are the convenience of having access to modern infrastructure, and enjoying a certain quality of living without having to commute on a daily basis to the city, which could be time-consuming as the road’s network continues to develop. When I am talk about quality of living I am referring to residential areas that have all the amenities that one can find within the city limits, with the additional advantage of avoiding traffic congestion and some of the social issues related to urban life. In other words this new generation of industrial parks are turning into liveable communities and satellite towns where resident companies can take advantage of the infrastructure needed for the growth of their business. We know for a fact that a lot of companies would rather live on-site, and industrial parks have enormous potential for growth in PNG.

Do you expect more industrial ventures to take place across the border with Indonesia?

AVENELL: If we consider the first liquefied natural gas (LNG) project and the project by France’s Total which is in the pipeline, most of the country’s GDP will be produced along the north-west corridor and the gulf region as a whole in the years to come. This alone should give a sense of the importance of this region to the country’s economic growth. When it comes to PNG-Indonesian bilateral relations, I can say that the town of Merauke, one of the easternmost cities in Indonesia, which sits just across the border from PNG, produces millions of tonnes of rice to feed the domestic market. Considering that PNG imports massive amounts of rice from Australia at a very high cost, it seems inevitable that the country should look westward internationally, not only for agricultural products but also to fuel its overall development in the long run. In the foreseeable future one would expect a number of infrastructural hubs to develop along the way, especially ports, which could support the growing level of trade between the two nations. There have been talks in the past of piping gas to Indonesia in return for food crops, but I am not sure how far these discussions have gone between the two administrations.

When do you expect the second PNG LNG project to produce the desired synergies with the domestic market, especially the construction industry?

AVENELL: I can say that behind the headlines, things have been moving ahead already, as a number of contractors and oil and gas providers have been busy with drilling operations in an attempt to quantify the size of the fields. On the other hand, these are very complex projects that require lengthy preparations. If we take the previous LNG project as a benchmark for example, the initial talks started as far back as 2001, while the actually construction began in 2009, so we feel relatively optimistic that the project remains on track, despite the inevitable economic slowdown caused by the collapsed of the oil market and other export commodities. A positive bit of news has been the prompt relocation of the commercial port to Motukea Island, which is happening earlier than expected and bodes well with the expected increase in economic activities that will soon take place in this part of PNG – even though the challenge will be the relocation of the international berth. As we have seen during the construction period of the PNG LNG project, the issue of capacity was one of the biggest challenges, and the sooner we address it, the better.