PNG LNG to go ahead
March 14, 2010
Santos Limited (STO) and Oil Search Limited (OSH) said that the $15 billion PNG LNG project was moving to full project execution stage, following the completion of financing arrangements and LNG buyers. The announcement follows up a press release from project lead Exxon Mobil on Saturday.
The project is expected to take around four years to build, with the first gas being pumped in 2014.
Over the 30-year life of the project PNG LNG was expected to produce over 9 trillion cubic feet of gas.
Exxon Mobil said the the project would supply four major LNG customers in the Asia region through long-term sales, including CPC Corporation in Taiwan and Japanese Osaka Gas Company. The other cornerstone customers are the Tokyo Electric Power Company and Unipec Asia Company Limited, a subsidiary of Sinopec.
Santos CEO, David Knox said completion of financial close leading to full project execution at PNG LNG was a significant step forward in the company’s LNG growth strategy.
“PNG LNG will provide Santos with long-term production and cash flows – our share of project production is expected to be approximately 9 million barrels of oil equivalent per annum at plateau including LNG and associated liquids,” Mr Knox said.
It was a sentiment echoed by Peter Botten, Oil Search’s managing director.
“Finalising all sales and purchase agreements with LNG buyers and completing the financing arrangements with lenders are major milestones for the project,” Mr Botten said.
”At first drawdown, Oil Search will also receive approximately US$300 million from the lenders, to reimburse 70% of eligible Project costs already incurred by the company,” Mr Botten concluded.
At the close Friday, Oil Search and Santos shares were trading at $5.66 and $14.06 respectively.
The project is expected to take around four years to build, with the first gas being pumped in 2014.
Over the 30-year life of the project PNG LNG was expected to produce over 9 trillion cubic feet of gas.
Exxon Mobil said the the project would supply four major LNG customers in the Asia region through long-term sales, including CPC Corporation in Taiwan and Japanese Osaka Gas Company. The other cornerstone customers are the Tokyo Electric Power Company and Unipec Asia Company Limited, a subsidiary of Sinopec.
Santos CEO, David Knox said completion of financial close leading to full project execution at PNG LNG was a significant step forward in the company’s LNG growth strategy.
“PNG LNG will provide Santos with long-term production and cash flows – our share of project production is expected to be approximately 9 million barrels of oil equivalent per annum at plateau including LNG and associated liquids,” Mr Knox said.
It was a sentiment echoed by Peter Botten, Oil Search’s managing director.
“Finalising all sales and purchase agreements with LNG buyers and completing the financing arrangements with lenders are major milestones for the project,” Mr Botten said.
”At first drawdown, Oil Search will also receive approximately US$300 million from the lenders, to reimburse 70% of eligible Project costs already incurred by the company,” Mr Botten concluded.
At the close Friday, Oil Search and Santos shares were trading at $5.66 and $14.06 respectively.
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