By Kim Christian
AAP
Oil Search's liquefied natural gas project in Papua New Guinea remains on track to deliver its first gas sales next year, despite overall costs blowing out to $US19 billion.
Oil Search, Australia's third-largest oil and gas producer, said the PNG LNG project would allow the company to quadruple its production base in the first full year of operation.
The company says the project is more than 75 per cent complete, with first LNG sales due to begin in 2014.
However, Oil Search estimates the total project cost increased from $US15.7 billion to $US19 billion ($A15.12 billion to $A18.29 billion) in 2012.
The company blamed exchange rate movements as the largest component of the cost increase.
"While the increase in costs is disappointing and, unfortunately, a feature of the current LNG project construction environment, PNG LNG project economics remain attractive," Oil Search chairman Brian Horwood said in the company's annual report.
The project's economics had been helped by a five per cent increase in project capacity, from 6.6 million tonnes per annum (MTPA) to 6.9 MTPA, while commodity prices were around 30 per cent higher than previously assumed.
Oil Search says the LNG project is the largest development yet undertaken in PNG.
The company said 2013 would be a year of transition for the project as it moved from heavy construction to equipment and systems installation and commissioning.
The Komo airfield, associated gas facilities and the onshore pipeline to the Hides gas field in the Southern Highlands Province were all expected to be completed this year.
The company plans to finalise tanker availability and is co-ordinating with customers for offtake to start in 2014.
Forecast production of between 6.2 million and 6.7 million barrels of oil equivalent (mmboe) in 2013 remains on track, compared to 6.4mmboe in 2012.
The annual report showed managing director Peter Botten earned a total of $US4.9 million in 2012, up from $US4.4 million in 2011.
The company said it was pursuing international growth opportunities in the Middle East and North Africa, including the Kurdistan region of Iraq, and Tunisia and Yemen.
Oil Search in February reported a net profit of $US175.8 million ($A171.4 million) for the six months to December 31, down from $US202.5 million in the previous corresponding period.
Oil Search's liquefied natural gas project in Papua New Guinea remains on track to deliver its first gas sales next year, despite overall costs blowing out to $US19 billion.
Oil Search, Australia's third-largest oil and gas producer, said the PNG LNG project would allow the company to quadruple its production base in the first full year of operation.
The company says the project is more than 75 per cent complete, with first LNG sales due to begin in 2014.
However, Oil Search estimates the total project cost increased from $US15.7 billion to $US19 billion ($A15.12 billion to $A18.29 billion) in 2012.
"While the increase in costs is disappointing and, unfortunately, a feature of the current LNG project construction environment, PNG LNG project economics remain attractive," Oil Search chairman Brian Horwood said in the company's annual report.
The project's economics had been helped by a five per cent increase in project capacity, from 6.6 million tonnes per annum (MTPA) to 6.9 MTPA, while commodity prices were around 30 per cent higher than previously assumed.
Oil Search says the LNG project is the largest development yet undertaken in PNG.
The company said 2013 would be a year of transition for the project as it moved from heavy construction to equipment and systems installation and commissioning.
The Komo airfield, associated gas facilities and the onshore pipeline to the Hides gas field in the Southern Highlands Province were all expected to be completed this year.
The company plans to finalise tanker availability and is co-ordinating with customers for offtake to start in 2014.
Forecast production of between 6.2 million and 6.7 million barrels of oil equivalent (mmboe) in 2013 remains on track, compared to 6.4mmboe in 2012.
The annual report showed managing director Peter Botten earned a total of $US4.9 million in 2012, up from $US4.4 million in 2011.
The company said it was pursuing international growth opportunities in the Middle East and North Africa, including the Kurdistan region of Iraq, and Tunisia and Yemen.
Oil Search in February reported a net profit of $US175.8 million ($A171.4 million) for the six months to December 31, down from $US202.5 million in the previous corresponding period.
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