19/10/2009 - 13:56

PNG gas project costs hit $US15bn

19/10/2009 - 13:56

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The cost of developing the PNG LNG project, which is competing with Western Australian gas projects for customers and resources, has lifted by 20 per cent to US$15 billion (A$16.7 billion).

PNG gas project costs hit $US15bn

The cost of developing the PNG LNG project, which is competing with Western Australian gas projects for customers and resources, has lifted by 20 per cent to US$15 billion (A$16.7 billion).

Project operator Exxon Mobil revised up the estimated capital expenditure for phase 1 of the project, which runs to 2015.

The cost will be shared by its joint venture partners, including Oil Search, which today announced an $895 million capital raising, and Santos.

The higher phase 1 cost estimate follows a number of material scope changes and amended treatment of some pre-start-up operating costs.

The planned annual production has been increased from 6.3 million tonnes to 6.6 million tonnes.

Oil Search said the joint venture is targeting a final investment decision for 8 December 2009, with first gas by late 2013 or early 2014.

 

The Santos announcement is below:

 

Santos today announced that it has received new cost and throughput information regarding the PNG LNG Project from the operator ExxonMobil. These estimates remain preliminary as the contract awards have not yet been made.

The revised capital expenditure for Phase 1 of the project is estimated to be approximately US$15 billion. This is an increase on the US$12.5 billion pre Front End Engineering and Design (FEED) estimate due principally to the inclusion of pre start-up operating costs and scope changes including acceleration of some works from later phases of the project. At the same time, LNG plant output is expected to increase from 6.3mtpa to 6.6mtpa resulting from greater fuel efficiency.

Overall the PNG LNG Project continues to progress towards an investment decision at the end of 2009 with target first gas remaining at late 2013 / early 2014.

 

 

 

 

 

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