(EnergyAsia, December 5 2011, Monday) — The ExxonMobil-led Papua New Guinea liquefied natural gas (LNG) project is being implemented according to schedule but it faces a four percent rise in cost to US$15.7 billion on account of a rising Australian dollar, said a venture partner.

Australia’s Oil Search which has a 29% stake in the project, said the export terminal is on course to make its first sales in 2014.

Giving a project update on behalf of its partners, Peter Botten, Oil Search’s managing director said:

“ExxonMobil has a long history of successful management and execution of complex, integrated, large scale projects.

Despite today’s highly competitive construction environment, the operator has confirmed the project schedule and that apart from exchange rates impacts, which, as highlighted previously, we have been monitoring for some time, the budget is largely unchanged.”

Oil Search said the increase from original budget of US$15 billion primarily reflects the rise in the Australian dollar against the US dollar.

The capital cost increase will be funded in line with the project’s existing financing terms, namely 70% by debt and 30% by equity contributions from the various partners. The project’s existing US$14 billion project finance facility provided by key export credit agencies, commercial banks and lending from the partners, fully covers the component of the increased cost that will be funded by debt, said Oil Search.

ExxonMobil’s 33.3% stake is held by subsidiary Esso Highlands Limited. Its other partners include the PNG’s state-owned National Petroleum Company (16.8%), Australia’s Santos (13.5%), Japan’s Nippon Oil Exploration (4.7%), and PNG landowner group Mineral Resources Development Company (2.8%).