PNG LNG Project Delivers Record Revenues to PNG

by PNG Business News - May 22, 2022

Photo credit: PNG LNG

The PNG LNG Project has paid over PGK 14 billion to the State since the start of LNG production. In 2021 alone, the State earned record revenues from the Project, with over PGK 2.2 billion delivered to the government.

Revenues delivered by the PNG LNG Project include PGK 7.1 billion flowing to Kumul Petroleum Holdings Limited and an estimated PGK 4.5 billion in various taxes paid to the Internal Revenue Commission.

“The revenues and associated benefits from the PNG LNG Project provide the PNG government the opportunity to promote sustainable, long term economic development.  We are extremely proud of our performance in contributing to the PNG economy,” said ExxonMobil PNG Managing Director Peter Larden.  “Since 2014 we have delivered over PGK 14 billion to the country, including some PGK 4.5 billion in taxes. This includes the April payment of PGK 1.1 billion in estimated tax for the first four months of 2022 linked to increased global oil prices and sustained volumes. This is one of the largest single tax payments by the PNG LNG Project to date.   We are pleased to see this increased revenue going to the State.”

Revenues from the PNG LNG Project are delivered through different mechanisms, including corporate and payroll taxes, equity (through State participation), development levy and royalties. As a founding member of the PNG Extractives Industry Transparency Initiative (PNG EITI), revenues and benefits from the PNG LNG Project as well as the broader petroleum and mining industry are reported and made publicly available.  Further detail on the types of direct and indirect benefits to PNG as well as the process through which revenues are delivered to the State, provincial government and landowners can be found at

ExxonMobil PNG Limited (33.2%), a subsidiary of Exxon Mobil Corporation, constructed and operates the PNG LNG Project on behalf of joint venturers: Santos Limited (42.5%), Kumul Petroleum Holdings Limited (16.8%), JX Nippon Oil & Gas Exploration Corporation (4.7%), Mineral Resources Development Company Limited (2.8%).  Petromin 0.2% was incorporated into Kumul Petroleum Holdings Limited (KPHL) in 2016.

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PNG Business News - November 08, 2021

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According to a projection, total earnings from the PNG LNG project would reach US$4.5 billion (K15.4 billion) in the fiscal year 2021. According to estimates recently released by JMP Securities, PNG-based equity and fixed interest markets broker/dealer, Kumul Petroleum Holdings Ltd (KPHL) will earn between US$750 million and US$775 million (roughly K2.5 billion and K2.6 billion) from the project this year, based on current high prices. It also estimates that total earnings from the PNG LNG Project to KPHL have been to the tune of US$5.1 billion (about K17.5 billion) since the project began operations in 2014.  “This is an estimate of revenue only,” said JMP Securities. “We are not in a position to comment on the overall costs of operations associated with the project or the wider operations of KPHL,” “Given the current high international crude oil prices and the time lag between movements in oil prices and the pricing of LNG under long-term contracts, we expect continued benign trading conditions for PNG LNG in the coming months. “This will result in a strong performance for the 2021 financial year as a whole. “We estimate that the PNG LNG Project has sold LNG, condensates, domestic gas and naphta valued at US$30.27 billion between April 2014 and September 2021. “More than 80 per cent of revenues come from the sale of liquefied natural gas (LNG). “We estimate that the PNG LNG has sold the equivalent of close to 600 million barrels of oil since 2014. “Around 100 million boe (barrels) have been sold by KPHL. KPHL sells around 35,000 to 40,000 boe per day. “We estimate that the highest average quarterly gas export prices achieved by PNG LNG are US$14.41 (about K49.4) per mmbtu (metric million British thermal units). This was achieved in the June quarter of 2014 on modest volumes.” In the September 2021 quarter, PNG LNG achieved around US$10 (about K34.3) in average gas sales prices. “The lowest gas prices were achieved in the September quarter of 2020 – around US$4.2 (about K14.4) per mmbtu.”   Reference: Pacific Mining Watch (2 November 2021). “Papua New Guinea expects K15 billion from PNG LNG in 2021”.

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