EFIC provided a direct loan to the PNG LNG project
The ExxonMobil-led liquefied natural gas (LNG) project in the Southern Highlands of Papua New Guinea (PNG) is the world’s largest project finance transaction.
The PNG LNG project will develop and operate an integrated LNG facility, including gas gathering and a conditioning plant, overland and subsea pipeline, a two-train LNG plant and an export terminal near Port Moresby.
Export Finance and Insurance Corporation (EFIC), Australia’s export credit agency, provided a US$350 million loan to the PNG LNG project, joining a syndicate of international export credit agencies and commercial lenders providing finance for the project.
EFIC’s motivation for participating was to support Australian exporters in pursuing contracts for the construction phase of the project. So far, Australian companies have been awarded or are preferred tenderers for more than US$1 billion of work, with substantial sub-contracting opportunities also available.
ASX-listed companies Oil Search and Santos are major investors in the project (at 29 per cent and
13.5 per cent respectively).
The LNG project has the potential to add considerably to PNG’s economic growth, with substantial royalties and dividends to flow to the Independent State of PNG and landholder groups.
‘EFIC’s experience in financing large, complex projects and long history supporting resource projects in PNG allowed us to work alongside an international team to ensure Australia’s involvement in this world class project’, said EFIC’s Executive Director, Origination and Portfolio Management, Peter Field.
‘EFIC’s involvement in this transaction demonstrated the complementary role export credit agencies perform when working with commercial banks. The transaction required substantial long term project finance, well beyond the capacity of the private market.’
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