TotalEnergies has agreed to transfer operatorship of the Papua LNG project in Papua New Guinea (PNG) to ExxonMobil PNG Antelope, as part of a set of contractual and commercial agreements ahead of a final investment decision (FID) on the development.
The French energy group will sell a 9.1% interest in the project, calculated after the back-in of Kumul Petroleum, to its Papua LNG partners in proportion to their existing holdings.
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TotalEnergies will keep a 20% stake while retaining its liquefied natural gas (LNG) offtake share. Project costs have also been reduced.
TotalEnergies said close to $4bn (€3.44bn) of savings have been secured since 2024 through design changes, including an alternative upstream condensate scheme developed in synergy with PNG LNG.
Further savings came from rebidding engineering, procurement and construction (EPC) packages to a wider group of Asian contractors. Capital expenditure currently stands at approximately $14bn.
The EPC tendering process has been completed, with contract award recommendations awaiting co-venturer approval.
The Gas Agreement signed with the Government of Papua New Guinea in 2019 has been amended to reflect the revised budget.
TotalEnergies has also formed an LNG marketing joint venture with state-related entities represented by Kumul Petroleum Holdings to sell 2.4 million tonnes per annum (mtpa) of the project’s planned 5.6mtpa output.
A separate offtake heads of agreement gives TotalEnergies access to 1.5mtpa for its own portfolio.
TotalEnergies chairman and CEO Patrick Pouyanné said: “These agreements mark a decisive step towards the final investment decision of Papua LNG. The transfer of operatorship enhances the project’s value creation and competitiveness by leveraging the synergies with PNG LNG during construction and operations phases.
“Papua LNG will enable the company to secure significant LNG volumes, strategically located to support energy supply diversification across fast-growing Asian markets. I want to thank the Government of Papua New Guinea, led by Prime Minister James Marape, for its continuous support, instrumental in achieving these major milestones.”
Meanwhile, Santos has signed a binding agreement to buy an additional 3.3% interest in PRL15 and the Papua LNG project for around $189m (A$261.8m), lifting its stake to 21%.
Santos said the deal would increase its equity LNG production from Papua LNG by around 19% to roughly 1.2mtpa. Completion depends on regulatory approvals and an FID, planned for the fourth quarter of 2026, and is effective from 1 January 2026.
Papua LNG will develop the Elk and Antelope fields in Gulf Province, with liquefaction infrastructure near Port Moresby. The remaining partners are ExxonMobil (34.1%), Kumul and MRDC (22.5%), and ENEOS Xplora (2.4%).
