SYDNEY--Exxon Mobil Corp. (XOM), the world's largest listed oil
company, said Monday that the cost of building a massive natural
gas-export project in Papua New Guinea has blown out to US$19
billion from a previous estimate of US$15.7 billion.
Foreign exchange fluctuations accounted for US$1.4 billion of
the increase, while delays from work stoppages and land access
issues added a further US$1.2 billion, Exxon Mobil said.
Another US$700 million was pinned on adverse logistics and
weather conditions including rainfall that exceeded historical
norms. The capacity of the liquefied natural gas, or LNG, plant has
been increased to 6.9 million metric tons per year from 6.6 million
tons, Exxon said.
It is the second cost blowout announced by the joint venture,
which also includes Australia's Oil Search Ltd. (OSH.AU) and Santos
Ltd. (STO.AU) as major shareholders. Last year, it increased the
cost estimate to US$15.7 billion from US$15.0 billion due to
foreign exchange movements.
"The project team was able to overcome significant delays and
still maintain overall schedule through re-sequencing work under
unique and very challenging circumstances," PNG LNG project
executive Decie Autin said in a statement.
First LNG cargoes are still expected to be shipped to Asian
customers in 2014, Exxon said.
Write to Ross Kelly at ross.kelly@wsj.com
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