LNG Project in PNG May Cost Less Than Planned - Oil Search
by Asia Pulse Pte Ltd
September 01, 2009
Project costs for the huge ExxonMobil-led Papua New Guinea liquefied natural gas (LNG) project may be lower than early estimates, Australian joint venture participant Oil Search Ltd says.
The project was previously expected to cost between US$11 billion and US$12.5 billion but an updated capital expenditure estimate would be released next month, Oil Search chief executive Peter Botten told a conference in Perth on Tuesday.
Mr Botten said there were "early signs of a positive cost environment".
"We've got (engineering) bids coming in this month and some time in October, we'll be releasing them out to the market when they're known," Mr Botten told AAP after the conference.
"There's not much point in speculating (about the project cost) - we'll know what the numbers are in five, six weeks' time."
Mr Botten said Oil Search would not further sell down its 34 percent stake in the project after a deal with Abu Dhabi's International Petroleum Investment Company (IPIC) was completed in coming weeks.
Oil Search last week said it had almost finalised the sale of an interest in a petroleum development license, including a 3.5 percent stake in the PNG LNG project, to IPIC.
"There's a potential deal with IPIC that we're endeavoring to complete as soon as we can ... in the next few weeks," Mr Botten said.
"Certainly, from our perspective, we don't anticipate necessarily having to, or wishing to, sell any more if this transaction consummates.
"But obviously, I can't speak for other parties in the project."
The joint venture has maintained its development timetable, with final project sanction expected in late calendar 2009, and first LNG sales are slated to commence in late 2013 or early 2014.
Construction started shortly after the June quarter.
The project's 6.3 million tonnes per annum initial production capacity is covered by offtake deals with Asian parties.
(C) 2009 Asia Pulse Pte Ltd.
PNG LNG Project
ExxonMobil; Oil Search Limited; Santos; Nippon Oil Exploration; AGL; MRDC); Eda Oil
Port Moresby Papua New Guinea