THE key financing terms for the PNG liquefied natural gas (LNG) project are being negotiated between the project’s financing team and a number of export credit agencies (ECA).
Oil Search Ltd, the global oil explorer and owner of most operating oil fields in PNG, disclosed this in its report to the Australian Securities Exchange (ASX) yesterday.
The agreed terms would include the 70% debt and 30% equity gearing ratio.
Oil Search is now focused on appraisal and exploration before the PNG LNG project start production in 2013 or early 2014 after its own review identified further growth potentials for the company.
“The PNG LNG project is seeking to raise about US$11 billion (K30 billion) in debt financing and work with potential lenders is progressing,” Stuart Symons, Esso Highlands Ltd’s senior public affairs adviser for the project, said.
Esso Highlands Ltd is the operator of the project and is a subsidiary of ExxonMobil Corp.
Oil Search also said detailed discussions were underway with commercial banks, based on ECA’s term sheet.
The ECAs are expected to be the cornerstone for project financing while the balance would come from banks, partner co-lending and potentially bond markets.
Offers from ECAs and banks are expected by last quarter of this year.
The company added it was in an excellent cash position of US$411 million (K1,129 million), with an undrawn facility for US$391 million (K1,074 million), plus likely sales proceeds from oil and LNG interests.