TotalEnergies Advances Papua LNG Project Toward Final Investment Decision

SEATTLE (Oil Monster): TotalEnergies has announced major commercial and contractual progress on the Papua LNG project in Papua New Guinea, bringing it closer to a final investment decision (FID).

The project’s engineering, procurement and construction (EPC) tender process has been completed, with contract award recommendations awaiting partner approval. Project optimization and renewed bidding have reduced estimated capital expenditure to around $14 billion.

TotalEnergies will also transfer operatorship of Papua LNG to ExxonMobil, which operates the neighboring PNG LNG project. The move is expected to create greater construction and operating synergies. As part of the restructuring, TotalEnergies plans to sell a 9.1% project interest and retain a 20% stake while keeping its LNG offtake entitlement.

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The company and Papua New Guinea’s government have also finalized amendments to the project’s gas agreement.

In addition, TotalEnergies and Kumul Petroleum Holdings have established an LNG marketing venture covering 2.4 million tonnes per year (tpy) from Papua LNG’s planned 5.6 million tpy output. A separate offtake agreement will provide TotalEnergies with 1.5 million tpy for its global LNG portfolio.

Following the planned ownership changes, ExxonMobil will hold 34.1% and operate the project, while TotalEnergies will retain 20%. The remaining interests will be held by Santos, ENEOS Xplora, Kumul Petroleum and MRDC.