Santos expands Oceania LNG exposure as ExxonMobil takes the reins

September 7, 2026, by Melisa Cavcic

Australian energy company Santos has taken steps to boost its stake in a liquefied natural gas (LNG) project in Papua New Guinea, Oceania.

Santos has executed a binding agreement to acquire an additional 3.3% participating interest, post state back-in, in PRL15 and the Papua LNG project from France’s TotalEnergies, after the French firm agreed with ExxonMobil to transfer operatorship of the project to ExxonMobil PNG Antelope, in parallel with a partial sell-down of its participating interest to the other joint venture partners in proportion to their existing interests.

Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, commented: “The Papua LNG project is a world-class development, strategically positioned to supply premium Asian markets and offering multiple value streams for Santos. ExxonMobil brings a proven track record of project delivery and reliable operations in Papua New Guinea, including PNG LNG, and is expected to realise significant synergies by operating both the upstream and midstream project scopes.

“The Papua LNG project will provide reliable, low-cost production for years to come and Santos is prepared to increase its investment accordingly. Papua LNG is a world-class project and this is the right time to increase our position. Santos continues to allocate capital in a disciplined manner across its global portfolio, prioritising exposure to jurisdictions that provide supportive long-term investment settings.”

This acquisition, which is conditional on regulatory approvals and the occurrence of a final investment decision (FID), will increase Santos’ participating interest in Papua LNG to 21% post state back-in and is expected to boost the Australian player’s equity LNG production from the project by around 19% to approximately 1.2 million tonnes of LNG produced per annum (mtpa).

The consideration the firm needs to pay is approximately $189 million. The acquisition is perceived to be consistent with Santos’ strategy of disciplined, value-accretive growth around existing infrastructure and bolstering exposure to Asian LNG demand. The effective date is set to be January 1, 2026.

Santos expects ExxonMobil’s proposed operatorship of the Papua LNG project, alongside its existing operatorship of PNG LNG, to deliver operational synergies and strengthen project execution. The completion of the acquisition is subject to conditions precedent, including receipt of regulatory approvals and the Papua LNG project achieving FID, planned for the fourth quarter of 2026.

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Gallagher emphasized: “As we move the Barossa gas and Pikka oil projects into operations, Papua LNG positions Santos for the next phase of value-accretive growth within our capital allocation framework that targets a free cash flow breakeven oil price of $45-50/bbl.

“Santos acknowledges and thanks TotalEnergies for their efforts in advancing Papua LNG over the last decade with the project on track for a final investment decision later this year.”

Changes in Papua LNG joint venture equity; Source: Santos

This comes a month after Daewoo E&C won preferred bidder status for the engineering, procurement, construction and commissioning (EPCC) of the Papua LNG project’s central processing facility (CPF) and wellpads.

The CPF and related infrastructure will process and treat natural gas produced from the Elk-Antelope gas fields before supplying it to a liquefaction plant at Caution Bay near Port Moresby.