SYDNEY (Bloomberg) -- The Exxon Mobil Corp.-led liquefied natural gas project in Papua New Guinea arranged as much as $14 billion in financing, clearing the way for construction to begin next year, said Oil Search Ltd., a partner in the venture.

The commitments from banks and export credit agencies will be more than enough to meet the anticipated $13 billion of debt required for the project, Port Moresby-based Oil Search said in a statement on Wednesday. Oil Search has estimated the project will cost $15 billion. With financing costs, that would rise to about $18.3 billion, spokeswoman Ann Diamant said by telephone on Wednesday.
“The key here is that they’ve raised more money than they were anticipating, at a lower cost than they were anticipating, and that can only be seen as a positive,” Adrian Wood, an analyst at Macquarie Group Ltd., said by phone on Wednesday from Sydney.
The Papua New Guinea development is among more than a dozen planned in Australia and the neighboring South Pacific nation aimed at tapping Asian demand for less-polluting alternatives to coal and oil. Exxon and its partners said Dec. 8 they had decided to proceed with the project, which Oil Search has estimated may double the size of Papua New Guinea’s economy.
Oil Search rose as much as 3.8 percent to A$5.73 in Sydney, the biggest increase in more than two months, and was at A$5.70 at 12:02 p.m. The benchmark S&P/ASX 200 Index gained 01 percent. Project partner Santos Ltd. gained 1.5 percent to A$13.81.
--------------‘Fantastic cost’
The financing includes commitments of almost $2 billion from a group of 17 commercial banks and was led by $8.3 billion of commitments from export credit agencies, Oil Search said in Wednesday’s statement. Australia offered a loan of as much as $500 million to support Australian participation in the development, Trade Minister Simon Crean said this month.
More financing is coming from export credit agencies than expected, Macquarie’s Wood said. He had anticipated $6.2 billion from that funding source. “Those are the cheapest sort of funds,” he said. “That is a fantastic cost of funding, and it shows you how willing the credit market is to lend to it.”
Exxon, the largest U.S. oil company, will own about 33 percent of the LNG venture, Oil Search 29 percent, Adelaide- based Santos 13.5 percent and Tokyo-based Nippon Oil Corp. 4.7 percent, the companies said Dec. 8. The Papua New Guinea government will own 16.6 percent and landowners 2.8 percent.
Based on those stakes, Oil Search’s share of the anticipated $13 billion of debt would be about $3.8 billion.
Oil Search raised A$895 million ($809 million) in October selling shares after dropping plans to sell a 3.5 percent stake in the project to International Petroleum Investment Corp. of Abu Dhabi.
Oil Search expects to convert its remaining preliminary sales agreements with gas customers into binding contracts by early January, Diamant said.
Exxon completed a 20-year agreement to supply fuel to Tokyo Electric Power Co., it said Dec. 7. China Petroleum & Chemical Corp., known as Sinopec, has also agreed to buy 2 million tons of LNG annually from the project over 20 years.