Media Release
8 December 2009
Australian Government Support for Gas Project in PNG
Trade Minister Simon Crean today announced that the Australian Government has offered a loan of up to USD 500 million (AUD 547 million) to support Australian participation in the development of the world-scale Liquefied Natural Gas project in Papua New Guinea.
"The ExxonMobil project is vital to PNG’s economic well-being, potentially putting PNG on a more sustainable economic growth path," Mr Crean said.
"This project will provide a boost to PNG, the region and Australia."
"It is estimated 12,000 skilled and unskilled workers will be required for the PNG gas project."
"Australian exporters have already been identified as the preferred tenderers for USD 1.2 billion (AUD 1.3 billion) of contracts. With the announcement of the project going ahead there is up to USD 3 billion (AUD 3.3 billion) of project-related contracts potentially available for Australian exporters."
"LNG is increasingly in demand as the requirement for cleaner sources of energy grows."
"Beyond Australia’s competitive advantage and expertise in this field, the PNG development could enhance the significance of our region as a reliable global supplier of energy."
"In this regard the Australian Government, with the PNG Government, is focussed on ensuring that the project lives up to its potential, and benefits all regions and people of PNG."
"I have agreed a Joint Understanding with the PNG Government on effective and transparent governance of the LNG project revenue."
"The Joint Understanding sets out the PNG plans to develop a Fund based on the Australia Future Fund model with Australian assistance.
"We intend to work with the PNG Government to monitor the implementation of the Joint Understanding very carefully."
Australian companies Oil Search and Santos hold over 40 per cent equity in the project. The loan of up USD 500 million is to be provided to the project sponsors through Australia’s Export Finance and Insurance Corporation.
USD 100 million (AUD 109 million) is being offered on EFIC’s commercial account and USD 400 million (AUD 438 million) on the National Interest Account.
In addition to Australia’s EFIC, debt financing for the project is being provided largely by export credit agencies, including from the United States, Japan, China and Italy.
The project is a world-scale vertically integrated upstream natural gas and liquefied gas development led by ExxonMobil Corporation. Phase One of the project has an estimated value of USD 18.3 billion (AUD 20 billion). Export production is expected to commence in 2014.
The text of the Joint Understanding can be found at: http://www.dfat.gov.au/geo/png/png_lng_091208.html
Media Inquiries
- Mr Crean’s Office 02 6277 7420
- Departmental Media Liaison 02 6261 1555