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PNG Biomass: An iconic renewable energy project

Oil Search’s PNG Biomass project in the Markham Valley is a long-term renewable energy initiative in Morobe Province, Papua New Guinea (PNG). It will use wood chips from trees sustainably grown and harvested in surrounding plantations to fuel a biomass power plant to provide up to 30 Megawatt (MWe) into the Ramu grid.

After years of planning and early development – including significant investments on feasibility studies, nursery development, plantation trials, plantation establishment and landowner engagement, with the involvement of world experts on sustainable biomass development – Oil Search acquired full ownership of the project in mid-2016 and committed to the Front End Engineering and Design (FEED) phase in 3Q 2016.

The intensive FEED phase was completed by the end of 2017. The technical and commercial aspects of the PNG Biomass project have been refined to support a Final Investment Decision.

The Project is supported by a 25-year Power Purchase Agreement (PPA) that was signed with PNG Power Limited (PPL) in December 2015. Under the PPA, PNG Biomass will generate up to 30 MWe of renewable, biomass-fired, reliable baseload power for the Ramu grid, with power delivery commencing in 2020 when the initial 15 MWe unit begins dispatching power.

After a competitive and transparent tender process that commenced in 2013, PPL selected the PNG Biomass project as a sustainable and renewable component of its ‘least cost development plan’ for the Ramu grid. The PNG Biomass project’s two 15 MWe units will match the largest turbine size on the existing grid and offer an economic, affordable, low-risk, and transparent way to complement and strengthen the Ramu grid.

The PNG Biomass project presents one of the most clean, renewable and sustainable energy initiatives in PNG’s history. Oil Search is proud to be driving this exciting power initiative, which will not only enhance generation capacity on the grid, but will also empower landowners and contribute to the well-being of local communities, create opportunities for future generations, and provide energy independence for PNG without compromising the country’s pristine and unique environment.

It will be an iconic renewable energy project that substantially enhances PNG’s reputation and international standing – leading to greater interest and investment in PNG.

Project Area: The Markham Valley

The Markham Valley is an area highly suitable for biomass power generation due to its rainfall and proximity to existing infrastructure. There are sealed roads from Lae, PPL has 132kV transmission lines passing over the plantations and biomass power plant to a nearby switching station, 22kV lines for construction power, and a new Lae port expansion underway for the import of materials. The land is predominantly flat with underutilised Kunai grasslands with suitable climate, rainfall, soil conditions, a nearby water supply from the Markham River, and low local population density.

These conditions enable a guaranteed fibre (woodybiomass fuel) supply provided by large scale, specially planted and sustainably managed plantations, located in close proximity to the power plant. By establishing the plantations only on degraded and underutilised Kunai and exotic grasslands and areas invaded by exotic invasive woody-weed species (such as rain tree, Gliricidia and Leauceana), the project is ensuring it will not contribute to deforestation in PNG or any negative food supply impacts. The plantations will convert grasslands into a multiple-use agricultural system that allows for intercropping and additional food production.

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PNG Biomass is located near the city of Lae in the Markham Valley, Morobe Province, Papua New Guinea.

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