LNG revenue to flow into PNG coffers in late 2015

THE much anticipated revenue from the PNG LNG project is expected to flow into the PNG Government’s coffers in the later part of 2015.

This was plainly revealed by Peter Graham, the managing director of ExxonMobil PNG Limited, and the operator of PNG LNG Project.

Mr Graham told media last Friday while pressed on to reveal how soon the much talked about "PNG LNG revenue" will flow into PNG coffers. He told reporters that so for 35 shipments of LNG shipments have already left the shores of Papua New Guinea to the energy-hungry Asian markets, especially Japan.

However, the revenues for the shipments will not flow into the country’s coffers as anticipated or led to believe to happen at the point of sale of cargoes.

The MD clarified that it was just hot air speculation and all misleading in relation to quick flow of revenues into the country. "The first equity payment to partners will be in the later part of 2015". But he said it’s "only after completion of test demonstrating to lenders that the Project is fully completed and operational," Mr Graham said.

He clarified those confusions surrounding the revenues from the 35 shipments so far saying, "all the sales proceeds are deposited in lender-secured accounts and payment form the accounts made are strictly dictated by the financing agreement."

He stressed that the PNG LNG Project was funded by the largest project financing ever done in the energy sector at a later increased value of K50 billion (US$15.5billion) in 2013.

He said it’s a project that was participated by an unprecedented group of lenders comprising of 17 international banks, 6 Export Credit Agencies and ExxonMobil co-lender.

However, it is good news for the beneficiaries on the royalty component of the revenues. Mr Graham said currently, royalties are currently flowing into a trust account created with the Central Banks under a special agreement while rest of the State’s equity will be after 2015.

Meanwhile, according to the brief, payment for project operating cost such as shipping, labour, materials and other associated cost have begun upon point of sale of the first 35 shipments while first scheduled repayment of loans are in 2015.

Mr Graham reiterated that equity distribution to partners including States 19% equity which National Petroleum Company of PNG holds will in later part of 2015.