The $US15 billion PNG LNG project has cleared its last hurdles and will proceed.
Exxon Mobil Corporation said on the weekend that sales and purchase agreements with LNG buyers, and financing arrangements with lenders, had been completed.
Santos and Oil search are the Australian groups (Oil Search is domiciled in PNG, but run out of Australia) involved in the project with 13.5% and 29.0% of the project respectively.
Exxon has a 33.2% stake and is the operator.
Exxon said that its affiliate, Esso Highlands Ltd, will now proceed with the full execution of the project, including gas production and processing facilities in the Southern Highlands and Western Provinces, and liquefaction and storage facilities with a capacity of 6.6 million tonnes per year near Port Moresby.
ExxonMobil Development Company president Neil Duffin said in the statement the project would be developed in compliance with the highest standards for health and safety.
He said it would maximise the value of the resource and support the PNG government’s moves to strengthen its economy and infrastructure base for the benefit of its people.
"The comprehensive national content plan focuses on development of the local workforce, expansion of supplier capability and strategic community investment," he said in the statement.
The initial investment in the project, excluding shipping costs, is estimated at $US15 billion ($A16.4 billion).
Over its 30-year life, the PNG project is expected to produce over nine trillion cubic feet of gas. It will change PNG for ever, and triple its annual GDP.
Construction will take about four years with first deliveries scheduled to begin in 2014.
Mr Duffin said project funding would come from co-venturers and through market-rate loans arranged with export credit agencies and commercial sources.
"Under an agreement in May last year, the PNG government approved the project along with local governments and land owners.
The overarching agreement outlines revenue streams from royalties, development taxes and equity dividends totalling between $US5.6 ($A6.1billion) over the project’s life.
The project will supply four major LNG customers in the Asia region through long-term sales – CPC Corporation of Taiwan, Osaka Gas Company Limited, The Tokyo Electric Power Company and Unipec Asia Company Limited, a subsidiary of China Petroleum and Chemical Corporation.
ExxonMobil said it expected demand for natural gas in Asia Pacific would more than double by 2030, relying on LNG imports to satisfy more than a third of regions demand in this period.
Exxon is staking more on gas in coming years than on oil. It expects to boost gas production while maintaining oil output.
The company has 69 trillion cubic feet of gas reserves, CEO, Rex Tillerson said in a presentation in the US last Thursday. That’s more than all the gas reserves in Canada.
Nyrstar, the Belgium zinc and lead processor that was once linked to Zinifex (now a very different OZ Minerals), has produced a more generous bid for CBH Resources than the market thought was coming.
The result of the 19.5c a share upgraded offer saw shares in CBH, a lead, zinc and silver miner, jump 28%, or 4c to 18 cents on the ASX on Friday.
Nyrstar’s revised offer now values the Australian group at $213.45 million.
In January CBH rejected Nyrstar’s original bid of 13.5 cents a share, and instead said it favoured deal with its largest shareholder, Japan’s Toho Zinc.
At the time it said it did not intend to have further substantive talks with Nyrstar.
But on Friday CBH said it had received a new proposal from Nyrstar which it saw as being superior to the Toho transactions.
CBH directors said they would produce a preliminary response to Nyrstar in respect of the new bid later this week.
"The revised proposal provides a certain outcome to CBH shareholders at a share price that, prior to Nyrstar’s initial proposal, CBH had not achieved since 7 July 2008," Nyrstar said in Friday’s statement.
Nyrstar said in its statement that under the proposed Toho transaction there was no certainty its Rasp zinc and lead mine in Broken Hill would be developed.
"Even if it is developed, it is unclear how CB would fund its 50 per cent share of the estimated project capital given the limited institutional ownership of CBH," it said.
CBH also said in the statement that a decision as to whether to proceed with the shareholders meeting scheduled for March 30,2010 to consider the Toho transactions will also be made shortly, and shareholders will be notified at the earliest opportunity.
Japan’s Sumitomo Chemical Company Friday started its tender offer for 20% of the shares in agricultural chemicals firm Nufarm Ltd at $14.00 per share.
The opening price for Nufarm shares on the Australian Securities Exchange on Friday was $8.50.
Sumitomo’s offer closes on April 9.
Nufarm’s board says Nufarm shareholders should accept Sumitomo’s offer.
Nufarm shareholders approved the acquisition of Nufarm shares by Sumitomo at a meeting on March 2.
If Sumitomo receives acceptances amounting to less than 20% of Nufarm shares, it will acquire further Nufa
