The Australian export credit agency EFIC has again lent its support to the US$18bn LNG project in Papua New Guinea.
The agency has provided performance bonds to support the participation of Australian engineering company McConnell Dowell Corporation in two contracts related to the project, together worth US$500mn.
The performance bonds are worth over US$20mn and have been issued under an existing bonding line set up by EFIC to McConnell Dowell in 2006. The engineering firm will be working on the contracts with international partners under a joint venture, and the contracts involve the construction of the new Komo airfield in Papua New Guinea, as well as related roads and bridges and the installation of fibre optic communications along one of the roads.
Peter Field, EFIC’s executive director, origination and portfolio management, comments: “We’re delighted that McConnell Dowell has won these contracts, as the principal reason for EFIC’s involvement in the financing is to encourage the use of Australian companies like McConnell Dowell in the project.
“We expect to see more contracts awarded to Australian companies in coming months, as the project gathers momentum.”
As well as McConnell Dowell’s involvement in the new plant, Australian companies Oil Search and Santos hold over 40% equity in the Papua New Guinea (PNG) project.
EFIC is already supporting the PNG LNG through lending at least US$350mn as part of a syndicate providing finance to the project.
In addition to EFIC’s loan, debt financing for the project is being provided largely by export credit agencies, including those 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 US$18.3bn. Export production is expected to commence in 2014.
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