High dollar blamed in LNG project cost blow-out
A GIANT LNG project planned for Port Moresby in Papua New Guinea is facing a $4.3 billion cost blow-out, taking costs from $15 billion to $19 billion.
Stakes in the venture are shared between ExxonMobil and its subsidiary Esso Highlands, Oil Search, NPCP, Santos, JX Nippon Oil & Gas Exploration, Mineral Resources Development Company and Petromin PNG Holdings.
A statement from Oil Search to the ASX said LNG was still expected to be exported in 2014.
It blamed a high dollar, work stoppages, land access issues and poor weather conditions for adding to the costs.
Oil Search managing director Peter Botten said the increase was disappointing.
"The extent of the change is considerably beyond the upper end of what might have been expected from cash drawdowns and project progress to date," he said.
"Oil Search intends to fully review the revised estimates and is committed to working with (operator Esso Highlands) to mitigate these cost increases."