Papua New Guinea
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‘PNGLNG is mature and profitable’

Kumul Petroleum Holdings managing director Wapu Sonk says the PNG LNG is a mature, profitable and de-risk petroleum project that has operated above its nameplate capacity.

This comes after the announcement that Kumu had finalised agreements with Santos to purchase a 2.6 per cent equity interest in the PNG LNG Project for US$576 million, plus US$160 million share of project debt.

“This transaction is the culmination of many months of discussions that have taken place with national and international financiers since the NEC gave its initial approval for KPHL to acquire additional equity in the PNG LNG Project in September 2022,” Mr Sonk said.

“The PNG LNG Project is a mature, profitable and de-risked petroleum project that has consistently operated above its nameplate capacity and which has many more years of commercial life left as additional gas fields are brought on line.”

Mr Sonk explained that on completion of the sale of the 2.6 per cent equity in the PNG LNG Project to Kumul Petroleum, Santos had agreed to grant KPHL a Call Option to acquire a further 2.4 per cent interest in the project, and that this Call Option must be exercised on or before 30 June 2024.

“The total purchase price for Kumul Petroleum to exercise the Call Option will be US$524 million, plus US$145 million share of project finance debt.

At the end of this process Kumul Petroleum will have acquired an additional 5 per cent equity in the PNG LNG Project.”

“Kumul Petroleum has ensured that entering into financing arrangements to acquire additional equity in the PNG LNG Project will not affect its financial capability to take up the State’s full 22.5 per cent equity entitlement in the forthcoming Papua LNG Project and also continue to pay annual dividends to the State, in line with our annual operating plans.

“Kumul Petroleum thank Prime Minister, Minister for State Enterprises, William Duma and NEC for their support,” Mr Sonk said.