Kumul Petroleum has extended the exclusivity period for its binding conditional offer to acquire a five per cent interest in PNG LNG from Santos Limited (ASX:STO).

The acquisition has an asset value of US$1.4 billion, including a proportionate share of PNG LNG project finance debt of about US$0.3 million.

Kumul previously extended the offer on 23 December 2022 until 30 April 2023.

Kumul has agreed it will work closely with Santos during this extension period in order to assist it in arranging the finalisation of its acquisition financing with third parties.

There is also strong support from both the government and the Joint Venture partners for the transaction proceeding.

Kumul Managing Director Wapu Sonk said the extension was necessary to finalise arrangements for the acquisition of additional equity in the PNG LNG project.

Sonk said: “We are grateful to Santos for the extension and for allowing us the opportunity to secure the additional project equity, for the success and prosperity of the PNG economy.

“We are currently identifying financiers who understand the unique potential in PNG.

“Kumul Petroleum is confident that we will be successful in financing the transaction with support from financiers and by working closely with Santos Limited.

“Given the current volatility in international financial markets and high interest rates, Kumul Petroleum needs this time extension in order to complete the equity acquisition transaction.

“We are presently dealing with a number of private sector lenders and I am confident that we will secure an appropriate financing package”.

“Our first priority is the sustained economic development of PNG’s economy and infrastructure, in which KPHL contributes to directly as a player in the petroleum industry and indirectly through its nation-building programs and payment of Dividend to State.”

“Increasing national equity in the PNG LNG Project is crucial to enhancing long term revenue base, influence local content in projects, national development and ensuring that Papua New Guineans benefit from future LNG and other hydrocarbon based projects.”

Santos Managing Director and CEO Kevin Gallagher said PNG LNG continued to represent compelling value for shareholders.

Gallagher added: “With the significant changes in the global energy landscape over the last 12 months, PNG LNG remains a world-class asset that is low-cost, low emissions intensity and delivers reliable LNG supply to our customers in Asia.”