UPDATE: PNG LNG To Pay Around US$3.5 Billion For Its Debt
December 15 2009 - 8:05PM
Dow Jones News
The PNG LNG liquefied natural gas project in Papua New Guinea,
operated by Exxon Mobil Corp. (XOM), will pay around US$3.5 billion
for its financing, bringing the total outlay for the project to
about US$18.5 billion, project partner Oil Search Ltd. (OSH.AU)
said Wednesday.
Oil Search said in a statement that the joint venture, which
also includes Santos Ltd. (STO.AU), has signed financing documents
for up to US$14 billion of commitments from lenders, which is more
than the US$13 billion debt needed to build the project.
The partners are still estimating that the project will cost
US$15 billion to build, but when US$3.5 billion in costs are
applied to the US$13 billion debt it needs, the total estimated
outlay rises to US$18.5 billion.
The financing charges will come in the form of fees and
capitalized interest, an Oil Search spokeswoman said.
The US$5.5 billion left after the US$13 billion debt will be
funded from equity contributions from the partners. The break down
of debt to equity is in line with previous guidance of a 70%
gearing level being applied to the project.
"Following formal commitments from lenders, all parties will now
move expeditiously to clear the remaining conditions precedent to
first drawdown, with financial close targeted by mid-February
2010," Oil Search said.
Of the up to US$14 billion in project financing, US$8.3 billion
will come from export credit agencies, US$1.95 billion from
uncovered commitments from a syndicate of 17 commercial banks, and
US$3.75 billion from co-lending from Exxon Mobil, Oil Search
said.
The PNG LNG partners on Dec.8 said they were sanctioning the
project, conditional on completion of financing and finalization of
two LNG offtake pacts.
The project, which will be designed to produce 6.6 million
metric tons of LNG a year, is due to ship first LNG in late 2013 or
early 2014.
-By Ross Kelly, Dow Jones Newswires;
61-2-8272-4692; ross.kelly@dowjones.com
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