The ExxonMobil-led PNG LNG project in Papua..New Guinea has seen a cost increase of US$3.3 billion to a total cost of US$19 billion, Platts reported. The project remains on schedule for start-up in 2014, however. Foreign exchanges accounted for US$1.4 billion of the increase, with delays from work stoppages and land access issues adding another US$1.2 billion. The other cost overruns were caused by adverse logistics and weather conditions, said project partner Oil Search. "The extent of the change is considerably beyond the upper end of what might have been expected from cash drawdowns and project progress to date," said Oil Search managing director Peter Botten. "In addition, the estimated foreign exchange impacts and the amount allowed for additional contingency is higher than we would have anticipated. Oil Search intends to fully review the revised estimates and is committed to working with the operator to seek to mitigate these cost increases."
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