Exxon's PNG LNG project costs balloon to $19 bn
Santos is well positioned to manage the impact of a strong Australian dollar on project capital costs, a Santos spokesman said, adding that its Australian dollar denominated balance sheet, cash balances and revenues provided an effective natural hedge.
Delays from work stoppages and land access issues had also pushed up construction and drilling costs, adding $1.2 billion to the total.
Landowner protests against the project this year prompted the government to deploy troops to restore law and order, according to local media reports.
Also, the impact of above average rainfall for most of the last two years, was estimated to have added $700 million.
Despite the cost increase, project economics are helped by the 5 percent increase in plant capacity and approximately 30 percent increase in commodity pricing since project funding in 2009, Decie Autin, PNG LNG Project Executive, said in a statement.
Exxon Mobil five years ago shelved a troubled PNG-to-Australia gas pipeline project after cost overruns pushed the cost of development to more than $3.5 billion. Exxon and its partners at the time said they would focus on more profitable gas projects in the country, including PNG LNG.
The energy major said
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