Pacific Lime and Cement looks to throw PNG fuel security a lifeline

• Expressions of interest open for proposed 1.8-billion-litre diesel and jet fuel reserve at Kido
• PLA seeking strategic partners to fund construction under a planned capital-light landlord model
• Project could support fuel security for Australia, PNG and the Pacific

Special Report: Pacific Lime and Cement is looking to bolster regional fuel security with plans for a proposed 1.8-billion-litre strategic fuel reserve at its Kido port precinct in Papua New Guinea.

Expressions of interest are being sought for the concept, which could serve Australia, PNG and the wider Pacific.

The company has completed a concept study for the reserve, which would store 11.25 million barrels of diesel and jet fuel across 52 tanks on a 70ha wharf-side site.

For context, Australian consumption averages about 92 million litres of diesel and 26 million litres of jet fuel per day, based on 2025 figures.

Located 35km from Port Moresby, the proposed facility would sit within Pacific Lime and Cement’s (ASX:PLA) 4500ha Kido/Rearea Special Economic Zone (SEZ) and port precinct.

The company is pursuing a capital-light landlord model, with strategic partners expected to fund construction and own the fuel.

PLA’s 87%-owned subsidiary Mayur Industrials PNG Limited (MIPL) could earn lease, sublicence and port-related income, subject to binding agreements.

PLA does not intend to fund Phase 1 tank farm construction from its balance sheet, apart from limited shared landlord infrastructure.

A regional fuel security opportunity

The Phase 1 concept comprises 41 diesel tanks and 11 jet fuel tanks across nine bunded compounds.

A preliminary layout indicates the tanks would occupy about 46ha of the available 70ha site.

The proposed reserve would have access to Kido’s deep-water port precinct, where two liquid bulk berths are included in the development concept and the underlying wharf infrastructure is under construction.

MIPL holds 99-year State Leases covering the relevant onshore and offshore areas, and liquid fuel storage is a permitted use under the SEZ licence.

The Papua New Guinea Government holds a 13% interest in MIPL.

Kido is about half the sailing distance to Australia’s east coast compared with Singapore, at around 1,830 nautical miles versus 3,630 nautical miles, according to PLA’s voyage modelling.

PLA estimates laden product tankers could reach Townsville in two to three days and Sydney in six to seven days, travelling through the Coral Sea without passing through Asian straits.

The reserve could be expanded over three phases, subject to securing customers, funding and approvals.

Why fuel security matters

The proposal comes as Australia moves to strengthen its fuel resilience following global supply disruptions.

In May, the Federal Government announced a fuel security package that included $3.2 billion for a government-controlled Australian Fuel Security Reserve of about one billion litres of diesel and jet fuel.

The broader measures also include a $7.5 billion Fuel and Fertiliser Security Facility and plans to increase mandatory industry fuel stockholdings by 10 days.

At about 1.8 billion litres, Kido’s proposed Phase 1 capacity would be around 1.8 times the size of Australia’s planned government-controlled reserve.

Australia is targeting 50 days of diesel and jet fuel reserves through its package.

That measure differs from the International Energy Agency’s separate requirement for members to hold oil stocks equivalent to 90 days of net imports.

Fuel stored in PNG would not automatically count towards Australia’s national stockholding obligations.

That would depend on government policy and any necessary intergovernmental arrangements.

Kido could offer additional regional storage capacity as governments look for ways to protect essential fuel supplies.

Another piece of PNG’s nation-building ambitions

For PLA, the proposed reserve would expand Kido’s role beyond its lime and cement developments.

It is progressing its Central Lime project, with the first major shipment of quicklime kiln equipment arriving at Port Kido earlier this month.

The broader industrial development has also delivered transport infrastructure, including a road and two bridges connecting the Kido and Rearea communities to Port Moresby.

A future fuel reserve would provide another potential use for the precinct’s industrial land and marine infrastructure, supporting PLA’s ambition to establish a larger manufacturing and logistics hub in PNG.

If developed, the reserve is intended to provide long-term infrastructure income for MIPL, its landowner partners and the State, while complementing PLA’s lime and cement operations.

Next steps

PLA will now formally test international interest through a structured process targeting sovereign, strategic and industry participants.

The company has already begun preliminary discussions with local PNG and other potential strategic parties.

Its immediate priorities include identifying and shortlisting suitable partners and customers, continuing discussions, and preparing the approvals pathway and front-end engineering design scope for Phase 1.

Although Kido’s underlying wharf infrastructure is environmentally permitted and the SEZ licence allows liquid fuel storage, the proposed reserve will still require its own development, environmental and marine approvals.

A final investment decision, third-party funding and binding customer agreements would also be required before construction could proceed.

No binding partnership, customer or funding agreement has been secured for the reserve.

This article was developed in collaboration with Pacific Lime and Cement, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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