TotalEnergies Advances Papua LNG Investment Decision after Major Cost Cuts
Papua LNG Project Progress and Key Developments
Clearing Contractual and Commercial Hurdles
Sept 7 (Reuters) - TotalEnergies said on Monday it had cleared several contractual and commercial hurdles for its Papua LNG project in Papua New Guinea, moving the plan closer to a final investment decision.
Engineering, Procurement, and Construction Updates
The French energy major said it had completed the tendering process for engineering, procurement and construction work for the liquefied natural gas facilities, with contracts now pending approval by its joint-venture partners.
Cost Savings and Capital Spending
Close to $4 billion has been achieved in cost savings since 2024 through rebidding those contracts and optimising the project design, bringing capital spending down to around $14 billion, TotalEnergies said.
Project Operations and Stakeholder Changes
Transition of Operations
The company said it had passed operations of the project to ExxonMobil, which already runs the neighbouring PNG LNG plant. TotalEnergies will also sell a 9.1% interest to its partners while retaining a 20% stake in the project, keeping its LNG offtake share intact.
Gas Agreement and Marketing Joint Venture
Amended Gas Agreement
The companies have also finalised an amended gas agreement with Papua New Guinea's government and set up an LNG marketing joint venture with Kumul Petroleum to sell 2.4 million metric tons per year (Mtpa) of the project's 5.6 Mtpa output, alongside an offtake deal giving TotalEnergies access to 1.5 Mtpa for its own portfolio.
Timeline for Final Investment Decision
TotalEnergies CEO Patrick Pouyanné said in July he was targeting a final investment decision by November.
(Reporting by Hugo Lhomedet in Gdansk, editing by Milla Nissi-Prussak)
