Sept 7 – TotalEnergies will sell a 9.1% interest in the Papua LNG project in Papua New Guinea and transfer operatorship to ExxonMobil Holdings Corp., as the partners seek to move the long-delayed development towards a final investment decision by the end of 2026.
The French energy company said on Monday that it would sell the stake to its existing partners in proportion to their current holdings while retaining a 20% interest in the project. TotalEnergies did not disclose the value of the transaction.
Australia’s Santos said it would acquire an additional 3.3% interest for $189 million, increasing its overall stake in Papua LNG to 21%. The transaction is expected to raise Santos’ equity LNG production by about 19% to approximately 1.2 million metric tonnes per year.
The transaction remains subject to Papua LNG reaching a final investment decision, which Santos expects in the fourth quarter of 2026. TotalEnergies said contractual and commercial issues required before that decision have now been resolved.
Papua LNG is designed to develop the Elk and Antelope gas fields in Papua New Guinea’s Gulf Province, with planned production of 5.6 million metric tonnes of LNG annually. Most of the output is expected to be supplied to Asian markets, positioning the project closer to some of the world’s largest LNG-consuming economies.
The development has faced years of delays, including disagreements with Papua New Guinea’s government. The changing global energy environment has also renewed attention on LNG projects capable of supplying Asian markets, particularly as geopolitical disruptions have highlighted the importance of diversified and geographically strategic energy supply.
ExxonMobil, which already operates the neighbouring PNG LNG project, will assume operatorship of Papua LNG. The move is intended to create greater operational coordination between the two developments.
“Bringing Papua LNG and PNG LNG under ExxonMobil operatorship is expected to strengthen alignment across the projects, improve execution efficiency, and support the development of Papua New Guinea’s world-class LNG resources,” an ExxonMobil spokesperson said.
TotalEnergies said it has completed the tendering process for the project’s engineering, procurement and construction contracts, with the agreements awaiting approval from its partners.
The project has also undergone significant cost reductions. TotalEnergies said approximately $4 billion in savings had been achieved since 2024 through renewed bidding processes and changes to the project’s design, bringing estimated capital expenditure down to around $14 billion.
The partners have also agreed an amended gas agreement with the Papua New Guinea government and established an LNG marketing joint venture with state-owned Kumul Petroleum. The marketing venture will handle sales of 2.4 million metric tonnes per year of Papua LNG’s planned 5.6 million metric tonnes of annual output.
Despite reducing its ownership, TotalEnergies’ share of the project’s LNG offtake will remain unchanged. The company will retain access to approximately 1.5 million metric tonnes per year for its global LNG portfolio.
The restructuring gives ExxonMobil a greater operational role in Papua New Guinea’s LNG sector while allowing TotalEnergies to reduce its capital exposure to Papua LNG without giving up its planned LNG offtake.
For Papua New Guinea, the project remains a major potential source of investment, export earnings and government revenue. Reaching a final investment decision in the fourth quarter would mark a significant step towards converting years of planning and negotiations into a large-scale LNG development.
