Government seeks Papua LNG gas deal renegotiation

Papua New Guinea’s government has dispatched a team to Singapore to re-negotiate the Papua LNG gas agreement terms signed with Total, operator of the proposed project, ExxonMobil and Oil Search. 

In its statement, the office of the PNG’s minister for petroleum noted that the National Executive Council authorized a State Negotiating Team lead by the minister of petroleum, Karenga Kua, to head off to Singapore to seek to re-negotiate the terms of the Papua LNG gas agreement, previously signed on April 19.

Since the new government has taken office at the end of May, it has stated that the initial gas agreement was “disadvantageous to the state” in certain respects.

Whether the project advances early or faces a setback will depend on the outcome of the negotiations.

Commenting on the government’s statement, Oil Search’s managing director Peter Boten said the company is looking “forward to further clarity on the state’s position regarding this agreement and ways forward for the project.” 

The Papua LNG project will have 5.4 million tons per annum (Mtpa) capacity consisting of two LNG trains of 2.7 Mtpa capacity each and will unlock over 1 billion barrels of oil equivalent of natural gas resources.

The gas production will be operated by Total and the LNG plant will be developed in synergy with ExxonMobil-operated PNG LNG project through an expansion of the existing plant in Caution Bay.

Total operates the Elk and Antelope onshore fields and is the largest shareholder of the PRL-15 permit with a 31.1 percent interest, alongside partners ExxonMobil (28.3 percent) and Oil Search (17.7 percent), post the State back-in right of 22.5 percent.