By OGJ editors
HOUSTON, Mar. 15 -- ExxonMobil Corp. reported that all sales and purchase agreements with LNG buyers and financing arrangements with lenders for its Papua New Guinea LNG (PNG LNG) project are complete and affiliate Esso Highlands Ltd. is “proceeding with full execution” of the project.
PNG LNG includes gas production and processing in the country’s Southern Highlands and western provinces; 6.6 million tonnes/year liquefaction capacity and storage northwest of Port Moresby on the Gulf of Papua; and more than 450 miles of pipelines connecting production, plant, and storage.
The project will supply four LNG customers in Asia through long-term sales: CPC Corp., Osaka Gas Co. Ltd., Tokyo Electric Power Co. Inc., and Unipec Asia Co. Ltd., a unit of China Petroleum and Chemical Corp. (Sinopec).
Investment for the initial phase of the project, excluding shipping, is estimated at $15 billion. Over its 30-year life, said the announcement, PNG LNG will produce more than 9 tcf of gas. First LNG deliveries are set for 2014.
Funding for PNG LNG project will come from the venture partners and through market-rate loans arranged with export credit agencies and commercial sources, said the company.
In May 2009, Papua New Guinea, representatives of project area landowners, and four provincial and 10 local governments approved the PNG LNG “Umbrella Benefits Sharing Agreement” (OGJ Online, May 27, 2009). The agreement outlines revenue-sharing streams from royalties, development taxes, and equity dividends totaling $5.6-7.5 billion over the project life.
Participating interests include Esso Highlands (operator, 33.2%), Oil Search Ltd. (29%), Independent Public Business Corp. (PNG government, 16.6%), Santos Ltd. (13.5%), Nippon Oil Exploration (4.7%), Mineral Resources Development Co. (PNG landowners, 2.8%), and Petromin PNG Holdings Ltd. (0.2%).