Ex-Im Bank Financing for Papua New Guinea LNG Project to Generate Significant Revenue for Island Nation, While Employing Workers at Dozens of American Companies
WASHINGTON, D.C. - The Export-Import Bank of the United States (Ex-Im Bank) has approved the largest financing transaction in its 75-year history — $3 billion to support U.S. exports for a liquefied natural gas (LNG) project in Papua New Guinea. Workers at over 55 U.S. companies will provide goods and services for the project.
Ex-Im Bank, the official export credit agency of the United States (ECA), five other ECAs and 17 commercial banks will provide financing for the project. Total project costs are estimated to be $18.3 billion.
The project has the potential to double the gross domestic product of Papua New Guinea.
Our approval of this project is yet another demonstration of how Ex-Im Bank is achieving its mission to provide financing for U.S. exports, and supporting U.S. export-related jobs, by supplementing what commercial lenders are able or willing to provide said Ex-Im Bank Chairman and President Fred P. Hochberg.
The ECAs and commercial lenders involved in financing the project conducted extensive research into the potential impacts of the project. The resulting study found that the production and export of LNG from this project will represent a net reduction in global greenhouse gas emissions compared to the case where customers were to meet their energy requirements by coal, fuel oil or diesel commonly used in the regional market, even though the project will add to Papua New Guinea's total emissions of greenhouse gasses.
At the ceremony announcing the investment, Papua New Guinea Prime Minister Sir Michael Somare said, ExxonMobil and our other private sector development partners have shown significant confidence in our nation. Cooperation between the public and private sectors will create value for the Papua New Guinea society as a whole and grow our economy in the future.
The project will involve development of upstream natural gas fields, a 692-kilometer onshore and offshore pipeline, a 6.3 million metric-tons-per-year liquefaction plant near Port Moresby, the capital of Papua New Guinea, and marine facilities from which the LNG will be shipped to foreign buyers. The project will sell the LNG in the large Asia-Pacific market.
In fiscal year 2009, Ex-Im Bank authorized more than $21 billion in support of U.S. exports overall, the highest level in the Bank's 75-year history, to help ease tightened liquidity during the economic crisis. Ex-Im Bank also set a record for financing of small business exports at $4.36 billion in fiscal 2009.
The Bank, an independent, self-sustaining federal agency, helps to create and maintain U.S. jobs by financing the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans. More information is available on the Bank's web site at www.exim.gov.