US OKs US$3bil financing to LNG

Business, Main Stories

THE US Export-Import Bank (Ex-Im Bank) has approved the largest financing transaction in its 75-year history amounting to US$3 billion (K8 billion) to support US exports for the PNG liquefied natural gas (LNG) project.
Workers at more than 55 US companies will provide goods and services to the project.
Ex-Im Bank, the official US export credit agency (ECA), five other ECAs and 17 commercial banks would provide financing for the project.
Total project costs are estimated to be US$18.3 billion (K49.59 billion).
The project has the potential to double the gross domestic product of PNG.
“Our approval of this project is yet another demonstration of how Ex-Im Bank is achieving its mission to provide financing for US exports, and supporting US export-related jobs, by supplementing what commercial lenders are able or willing to provide,” Ex-Im Bank chairman and president Fred P Hochberg.
The ECAs and commercial lenders involved in financing the project conducted extensive research into the potential impacts of the project.
The resulting study found that the production and export of LNG from this project would represent a net reduction in global greenhouse gas emissions compared to the case where customers were to meet their energy requirements by coal, fuel oil or diesel commonly used in the regional market, even though the project would add to PNG’s total emissions of greenhouse gases.
At the ceremony announcing the investment, Prime Minister Sir Michael Somare said: “ExxonMobil and our other private sector development partners have shown significant confidence in our nation.
“Co-operation between the public and private sectors will create value for the PNG society as a whole and grow our economy in the future.”
The project would involve development of upstream natural gas fields, a 692km onshore and offshore pipeline, a 6.3 million metric-tonnes-per-year liquefaction plant near Port Moresby, and marine facilities from which the LNG would be shipped to overseas buyers.
The project would sell the LNG in the large Asia-Pacific market.