Gas project fixes US$14bil commitments from lenders

Business, Normal

THE PNG liquefied natural gas (LNG) project has secured US$14 billion (K38 billion) of commitments by lenders for project financing.
This would be enough to meet the estimated US$13 billion (K35 billion) of debts required for the project on an agreed 70% gearing basis.
Yesterday in New York, the lenders signed the various financing that make up the PNG LNG project financing.
Peter Botten, managing director for Oil Search Ltd, while announcing the commitments by export credit agencies (ECA), said in a statement that the financing had been led by US$8.3 billion (K22 billion) of commitments from key ECAs, including US Exim, JBIC and NEXI from Japan, China Exim, SACE from Italy and EFIC from Australia.
In addition to the ECAs, the financing also included US$1.95 billion (K5.25 billion) of uncovered commitments from a 17 commercial banks (without ECA or political risk insurance) and US$3.75 billion (K10.09 billion) of co-lending from project owner ExxonMobil Corp.
 “Following formal commitments from lenders, all parties will now move expeditiously to clear the remaining conditions precedent to first drawdown, with financial close targeted by next mid February,” Mr Botten said.
Meanwhile, the stock market reacted positively in the ASX yesterday when Oil Search announced that financial deal for the PNG LNG project.
Oil Search shares which have been freefalling since last week, moved up 3.07% to trade at A$5.69 (K14) on the ASX yesterday.
The PNG LNG project is being operated by Esso Highlands Ltd, a subsidiary of ExxonMobil.
Esso holds 33.2% interest in the project, Oil Search 29%, Independent Public Business Corp on behalf of the PNG Government holds 19.6% (Mineral Resources Development Corp – 2.8% and Eda Oil, a subsidiary of Petromin PNG Holdings Ltd –  0.2%), Santos 13.5%, and Nippon Oil Ltd 4.7%.