PNG leads wave of jumbo ECA project loans

(Reuters, Sydney, 18 January 2019) The expansion of Papua New Guinea’s giant gas project is turning up the heat in the Asia Pacific project finance arena, with a slew of jumbo financings set to emerge from Oceania in the next 18 months. Stakeholders in the Papua New Guinea Liquefied Natural Gas project are in discussions with export credit agencies and commercial banks for up to US$9.8bn of debt to fund the next phase of the project, in what will be the region’s biggest project financing since 2010. Another major deal is also in the works as Australia Pacific LNG prepares to refinance US$3bn of project debt. JP Morgan has been named financial adviser. The long-awaited expansion of the PNG LNG project is estimated to cost around US$12bn-$14bn and involves construction of three new gas processing units, called trains, at the Papua New Guinea LNG plant. It is the largest resources-related borrowing in Oceania since March 2010, when the PNG LNG project raised US$14bn in initial funding from ECAs, commercial banks and lead sponsor and operator ExxonMobil. The US$1.95bn commercial portion attracted 17 banks. PNG LNG is already operational.