A foundation for PNG’s long-term growth

WITH regard to recent ar­ticles and commentaries on the estimated cost in­crease of the PNG LNG project, it is important to rely upon factual information in understanding the reasons for the anticipated cost increase and to recognise the long-term benefits of the project.
The project remains on track to meet first gas deliveries in 2014, with some 70% of the work now completed.
Projects of this size elsewhere in the world are experiencing cost in­crea­ses and such increases should be considered in context.
ExxonMobil operates around the world in a broad range of conditions.
On the PNG LNG pro­ject, our team together with the PNG government and the local communities where we work, we have overcome signi­ficant challenges to maintain both schedule and social commitments.
Despite the anticipated higher costs, project economics remain attractive, helped by an increase in plant capacity.
In PNG LNG’s case, the rising value of kina and Australian dollar in relation to the US dollar is the single biggest contributing factor.
Other projects in Australia are facing similar foreign exchange or forex issues.
Forex impacts have been compounded by de­lays from work stoppages due to community disruptions and land access issues as well as challenges due to much higher than normal rainfall which increased construction and associated logistics costs.
Job creation and the im­pact on infrastructure are significant, while building the skills of Pa­pua New Guinean workers through training will leave a lasting and positive legacy.
The PNG LNG project is proud to be part of a strong economic foundation for growth.

Peter M. Graham
Managing director
Esso Highlands Ltd