Exxon, PNG near fiscal deal on LNG project-sources

PERTH, April 3 (Reuters) - U.S. oil major Exxon Mobil Corp XOM.N and the Papua New Guinea (PNG) government could reach an agreement on the fiscal terms for a proposed liquefied natural gas (LNG) project by as early as mid-April, two sources said on Thursday.

The agreement, when finalised, will pave the way for Exxon Mobil and its venture partners, including Oil Search Ltd OSH.AX and Santos Ltd STO.AX, to begin front end engineering and design (FEED) work on the proposed $10-$11 billion project.

“The parties are very close to reaching an agreement. The earliest timeframe would be by mid-April. The government wants to finalise the issue by the end of the month,” said one of the sources, who has direct knowledge of the negotiations.

“We are talking about small percentages here. It won’t be difficult to reach a middle ground,” he said.

The fiscal agreement was originally due to be finalised with the PNG government by the end of last month. (Reporting by Fayen Wong)