Name and Location
Papua New Guinea (PNG) liquefied natural gas (LNG) project.

Client
The project is a joint venture (JV) between Esso Highlands, a subsidiary of ExxonMobil (33.2%); Oil Search (29%); State-owned Independent Public Business Corporation (IPBC) (16.6%); Santos (13.5%); Nippon Oil Explor-ation (Noex) (4.7%); State-owned Mineral Resources Development Company (MRDC) (2.8%); and Petromin PNG Holdings (0.2%).

Project Description
The project involves the construction of an integrated upstream and downstream facility, which will be the first in PNG. It proposes to commercialise the undeveloped petroleum resources in the Hides, Angore and Juha fields, as well as the associated gas resources in the oilfields of Kutubu, Agogo, Gobe and Moran, in the Southern and Western Highlands provinces of PNG.

The PNG LNG project will include onshore production facilities, including wells, primary gas treatment plant and gathering facilities; an onshore and offshore pipeline; a condensate pipeline; a subsea gas pipeline carrying gas from the coast to the LNG plant site; a 6.6-million-ton-a-year LNG processing plant; additional gas treatment facilities; LNG and secondary condensate extraction and storage; potential liquid petroleum gas recovery; an export jetty; and marine offloading facilities.

Value
The project is estimated at $19-billion.

Duration
The PNG LNG project started production in April 2014, and shipped its first cargo by May, well ahead of schedule.

Latest Developments
Payments from the PNG LNG project will begin to flow after the $19-billion development reached financial completion.

JV partner Oil Search has reported that it will receive an $807-million windfall from the project, comprising its first distribution payment of $700-million and $107-million of cash held in escrow during the construction phase.

Oil Search will use the payout to help fund the company’s growth activities, in particular LNG expansion and development, which it says remains attractive despite the current oil price outlook.

“Reaching financial completion is a major milestone for the project, which has now been operating very reliably, and at levels above expectations, for more than eight months,” said Oil Search MD Peter Botten.

To date, the project has shipped 65 LNG cargoes to customers.

Operator ExxonMobil PNG MD Andrew Barry says that with the achievement of financial completion, completion guarantees will be released, while loan repayments will start, along with coventure distributions.

Key Contracts and Suppliers
CBI Clough – a joint venture (JV) between CB&I (65%) and Clough (35%) (EPC contract for Hides plant, wellheads and associated piping and infrastructure); Chiyoda Corporation and JGC Corporation (engineering, procurement and construction (EPC) contract for the LNG processing plant); Spiecapag (EPC contract for the onshore pipelines and infrastructure); Saipem (EPC contract for the offshore pipeline); the JV between McConnell Dowell Constructors and Consolidated Contractors Group Offshore (EPC contract for support infrastructure); and Mott MacDonald, subcontracted by the Chiyoda/JGC JV (power systems studies).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
CB&I investors contact Mark Coscio, tel +1 832 513 1200.
CBI Clough, marketing and communications manager Kristy McGrath, tel +61 8 9281 9344, fax +61 8 9481 6699 or email kristy.mcgrath@clough.com.au.
Consolidated Contractors, tel +30 210 6182000 or fax +30 210 6199224.
ExxonMobil media contact Miles Shaw, tel +675 322 2111 or
email miles.j.shaw@exxonmobil.com.
IPBC, tel +675 321 2977, fax +675 321 2916 or +675 321 0192, or email ipbc@ipbc.com.pg.
JGC Corporation investor relations, email ir@jgc.co.jp.
McConnell Dowell Constructors, tel +61 7 3421 8200 or fax +61 7 3219 7244.
Mott MacDonald, Christina de Burgh-Milne, tel +44 20 8774 3639 or email Christina.deburgh-milne@mottmac.com.
MRDC, tel +675 325 5822, fax +675 325 2633 or email enquiry@mrdc.com.pg.
Noex, tel +81 3 3502 0521 or fax +81 3 3501 2692.
Oil Search, tel +675 322 5599, fax +675 322 5566 or email investor@oilsearch.com.
Petromin PNG Holdings, tel +675 325 2743, fax +675 325 2656 or email contact@petrominpng.com.pg.
PNG LNG project office, tel +675 322 2111 or fax +675 320 3457.
Saipem, tel +39 02 52034653, fax +39 02 52054295 or investor relations manager Salvatore Colli, email investor.relations@saipem.eni.it.
Santos, tel +675 321 2633 or fax +675 321 2847.
Spiecapag, tel +33 1 57 60 95 15, fax +33 1 57 60 97 78 or email communication@spiecapag.com.