TotalEnergies said Monday that it has cleared the last major commercial hurdles on the Papua LNG project and is now positioning the long-delayed project for a final investment decision, after cutting nearly $4 billion from the budget and transferring operatorship to ExxonMobil.
The French major said EPC tendering is complete, with award recommendations ready for co-venturer approval. Design changes — including an alternative upstream condensate scheme that uses existing PNG LNG infrastructure — plus a broader Asian contractor panel brought estimated capital expenditure down to about $14 billion.
To deepen integration with the neighboring PNG LNG plant, TotalEnergies will transfer operatorship to ExxonMobil. It will also sell a 9.1% interest (after the state’s Kumul Petroleum back-in) to existing partners and retain 20%.
After the farm-down and state back-in, interests would stand at ExxonMobil 34.1% (operator), Santos 21.0%, Kumul Petroleum and MRDC 22.5%, TotalEnergies 20%, and ENEOS Xplora 2.4%. TotalEnergies keeps its LNG offtake share.
The 2019 Gas Agreement has been amended to match the new cost base. TotalEnergies and PNG state entities have also formed a marketing joint venture to sell 2.4 million tonnes per annum (Mtpa) of the project’s planned 5.6 Mtpa. A heads of agreement gives TotalEnergies 1.5 Mtpa for its own portfolio.
Papua LNG will develop the onshore Elk and Antelope fields in Gulf Province and liquefy gas at Caution Bay, next to ExxonMobil’s existing PNG LNG plant.
The midstream is the project’s distinctive piece: a roughly 320-kilometre pipeline network of which only about 60 km is onshore. The balance — on the order of 260 km — runs offshore across the Gulf of Papua. The scheme also includes a new floating storage and offloading vessel (FSO) moored in the gulf and shared with PNG LNG.
TotalEnergies CEO Patrick Pouyanné called the package a “decisive step” toward FID and said the ExxonMobil operatorship would capture construction and operating synergies. First production timing was not restated in Monday’s announcement; partners have previously pointed to a late-2026 investment decision.
