March 16, 2012 / 9:59 AM / 7 years ago

Exxon halts work at PNG LNG site due to land dispute

* Work halted at part of Exxon’s PNG LNG project

* Disgruntled landowners threaten employees

* Landowners requesting additional compensation for land

* PNG LNG development still on schedule for 2014 startup

PERTH, March 16 (Reuters) - U.S. oil giant Exxon Mobil had been forced to stop work in an area of its $15.7 billion liquefied natural gas (LNG) project in Papua New Guinea due to another land dispute with locals, the company said on Friday.

Esso Highlands, the Exxon subsidiary which operates the LNG development stopped work in the Hides region of the Southern Highlands after locals demanding additional compensation from the company for their land threatened workers at the plant, Exxon spokeswoman Rebecca Arnold said.

Work on the project, which is expected to produce 6.6 million tonnes of LNG that will be exported, was also delayed in 2009 due to landowner concerns.

“Work has been temporarily suspended in the Hides area, but is continuing throughout the rest of the project area,” Arnold said, adding the stoppage would not delay the project’s startup date of 2014.

Exxon Mobil leads a consortium building the project which is Papua New Guinea’s biggest-ever resource undertaking and which could boost GDP by 20 percent.

Arnold said the police were now involved in the dispute and the company has “taken steps to engage with the group to understand their concerns.”

Landowners in the Hides region recently blamed Exxon for a landslide which took place at the site of quarry that had been used by the company. Arnold said the recent landowner claims were unrelated to the landslide incident.

The LNG project is a joint venture between Exxon Mobil, Oil Search, Santos, Japan’s JX Nippon Oil and Gas Exploration, a unit of JX Holdings, and the Papua New Guinea government.

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