EXXONMOBIL, the operator of the PNG LNG project, has set a target date of Dec 8 this year for the final investment decision.
“While the target for first gas remains late 2013 or early 2014, substantial work remains to be completed and activities are on track to meet this target sanction date,” Oil Search Ltd managing director Peter Botten said.
Oil Search has a 33% share in the LNG project.
In his third quarter report to the Australian Stock Exchange, Mr Botten said: “It is pleasing to note that substantial engineering, commercial and financing activities remain on track to meet a target sanction date for the PNG LNG project of Dec 8 2009.”
Material work to achieve this target took place during the quarter and continues to accelerate towards December.
During the quarter, front-end engineering design (FEED) activities for the PNG LNG project were completed and bids were received for the projects key construction deals.
A comprehensive commercial and technical analysis of these bids was underway, with contracts including the selection of the LNG plant contractor expected over the next month.
ExxonMobil has recently provided the project participants with an updated provisional capital cost estimate, following the completion of FEED and receiving bids for the key construction contracts.
The initial phase development costs up to 2015 are now estimated at US$15 billion (K40.1 billion) including FEED and early work costs and pre-start up operating costs.
The total costs over the full life of the project including the initial and subsequent phases, are largely unchanged.
To date, the PNG LNG participants have already spent about US$1billion (K2.67 billion) on FEED and early works activities.
When the project is sanctioned this coming December, Oil Search’s estimated share of future costs is US$5 billion (K13.4 billion), of which US$1.3 billion (K3.48 billion) will be funded by equity and the balance by debt.