TotalEnergies and its joint venture partners have reached commercial and structural milestones on the multi-billion-dollar Papua LNG development, paving the way for a final investment decision (FID) on the export venture in Papua New Guinea.
As part of a strategic realignment to maximise operational synergies with the existing PNG LNG asset, TotalEnergies will transfer project operatorship to US energy giant ExxonMobil.
To support the handover, TotalEnergies will sell a 9.1 per cent stake to its co-venturers, retaining a 20 per cent interest while preserving its dedicated LNG off-take share.
The ownership restructure coincides with significant cost reductions following a design optimisation and EPC tendering review.
By developing an alternative upstream condensate scheme and re-bidding major contracts across Asian engineering firms, the joint venture has achieved approximately US$4 billion (AU$5.56 billion) in capital savings, reducing total project capital expenditure to around US$14 billion.
Commercial frameworks have also been locked in with the Papua New Guinea government, updating the 2019 Gas Agreement to safeguard project economics during market downturns while maintaining long-term state revenues.
Additionally, TotalEnergies and state-owned Kumul Petroleum Holdings Limited have established a marketing joint venture to commercialise 2.4 million tonnes per annum (Mtpa) of the project’s planned 5.6 Mtpa total capacity.
TotalEnergies Chairman and CEO Patrick Pouyanné said the agreements represent a decisive step towards commercialisation.
“The transfer of operatorship enhances the project’s value creation and competitiveness by leveraging the synergies with PNG LNG during construction and operations phases,” Pouyanné said.
“Papua LNG will enable the company to secure significant LNG volumes, strategically located to support energy supply diversification across fast-growing Asian markets.”
Following the farm-down and state back-in execution, ExxonMobil will hold a 34.1 per cent operating stake alongside Santos, with 21 per cent, state entities with 22.5 per cent, TotalEnergies with 20 per cent, and ENEOS Xplora with 2.4 per cent.
Papua LNG is a natural gas production and liquefaction project located in Papua New Guinea that will monetise the gas resources of the Elk and Antelope fields in the Gulf Province.
The project is designed to produce 5.6 Mtpa of LNG, primarily for Asian markets.
