Oil Search's PNG project financed

Co-venturers raise an extra $US1.5 billion for a LNG project cost increase.

Oil Search's (OSH) co-venturer in a Papua New Guinea liquefied natural gas project, Exxon Mobil, has completed financing arrangements.

In a statement to the Australian Securities Exchange, the energy group said Exxon subsidiary Esso Highlands has raised $US1.5 billion ($1.6 billion) of supplemental project financing, taking the total project financing facility to $US15.5 billion.

The funds were sourced from co-venturer and commercial bank lenders and will be used to finance the debt component of the project cost increase announced in November last year.

The estimated cost of the project remains unchanged from September estimates at $US19 billion and the project remains on track to deliver LNG in the second half of 2014, Oil Search said (see Tim Treadgold's A gas giant in the making).

Oil Search has a 29% stake in the project, meaning it will be entitled to 1.94 million tonnes of LNG a year.

Analysts overwhelmingly rate the stock a "buy", with an average price target of $9.59. Shares in the company closed yesterday at $8.45.

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