TotalEnergies advances Papua LNG toward FID
- EPC tendering process completed with contract award recommendations ready for co‑venturer approval after ~US$4 billion of cost savings, bringing capex to around US$14 billion.
- Operatorship will transfer to ExxonMobil; TotalEnergies will sell a 9.1% interest (post Kumul back‑in) and retain a 20% stake.
- The 2019 Gas Agreement with Papua New Guinea has been amended to reflect the updated budget and optimizations to secure project economics.
- A LNG marketing joint venture will commercialize 2.4 Mtpa of the 5.6 Mtpa project and a Heads of Agreement gives TotalEnergies access to 1.5 Mtpa for its portfolio.
Milestones achieved
TotalEnergies reports that Papua LNG has completed the EPC tendering process, with contract award recommendations ready for co‑venturer approval. Project design optimization and rebidding of EPC packages delivered close to US$4 billion of cost savings and reduced capital expenditure to about US$14 billion.
Commercial and ownership changes
The parties decided to transfer operatorship to ExxonMobil, operator of PNG LNG, and TotalEnergies will farm down part of its interest. After the farm‑down and the State's exercise of its back‑in right, TotalEnergies will hold 20% of Papua LNG; ExxonMobil will hold 34.1% (operator), Santos 21.0%, ENEOS Xplora 2.4%, and Kumul Petroleum Holdings Limited and MRDC 22.5%.
Project economics and offtake
The Gas Agreement signed in 2019 has been amended to reflect the updated budget and optimizations, aiming to ensure robust project economics including in low cycles while preserving the State's long‑term fiscal interests. A LNG marketing joint venture between TotalEnergies and PNG state‑related entities will jointly commercialize 2.4 Mtpa of the project's 5.6 Mtpa production, and a LNG offtake Heads of Agreement gives TotalEnergies access to 1.5 Mtpa for its global portfolio.
Next steps
With contractual, commercial and ownership milestones in place and an operatorship transition planned, the project parties say Papua LNG is positioned to progress to a Final Investment Decision while maintaining continuity of activities and commitments to Papua New Guinea authorities and stakeholders during the transition.
Source: TotalEnergies
