Japan's JX Nippon Expands Investment in Papua New Guinea's LNG Sector

By: PNG Business News June 10, 2023

Photo: Patrick Pouyanné, CEO TotalEnergies, and Toshiya Nakahara, CEO of JX Nippon (Credit: JX Nippon)

Japan, the largest importer of liquefied natural gas (LNG) from Papua New Guinea (PNG), has further strengthened its position in the country's LNG sector. Japanese oil and gas exploration company JX Nippon has acquired a 2.58% stake in the Papua LNG project from TotalEnergies, marking a significant development for both JX Nippon and Japan's energy interests. The Japanese embassy in Port Moresby hailed this move as a "huge step" for JX Nippon, emphasising the potential for collaboration between PNG and Japan in various sectors.

"With the full support of the PNG Government, activities relating to front-end engineering design, LNG marketing, and financing are progressing well," stated Embassy economy councillor Isono Satoshi, highlighting the positive progress made in the Papua LNG project. "Papua LNG partners are targeting to achieve the final investment decision by the end of this year or early next year," Satoshi added, underscoring the importance of JX Nippon's involvement in the project.

The Papua LNG project is centred around the Petroleum Retention Licence 15 area (PRL15), which encompasses the ELK-Antelope fields in Gulf, the largest onshore fields in the region and the foundation of the project. In a statement, JX Nippon expressed their anticipation for the project, stating, "The Papua LNG project would have liquefaction capacity of 5.6 million metric tonnes of LNG per year with first production expected by the end of 2027 to early 2028. JX Nippon anticipates the demand for liquefied natural gas as a transition was expected to remain strong globally."

Satoshi commended JX Nippon's acquisition and its implications for both PNG and Japan. "Japan is PNG's biggest importer of LNG and this agreement between JX Nippon and TotalEnergies is a sign of the potential the country has for international investors," he affirmed. "This is a huge step for the firm and for Japan as we look to the future where PNG and Japan can continue working in collaboration, not only in the realm of politics but also in the economy and trade."

TotalEnergies, a French multinational and one of the leading LNG producers worldwide, has also been an active participant in the Papua LNG project. The company has agreed to sell a 2.8% stake in Papua LNG to JX Nippon, further solidifying the latter's presence in the project.

"Roughly half of LNG from PNG had been shipped to Japan consistently," Satoshi highlighted, emphasising the significance of Japanese companies' involvement in the country's LNG sector. "It is of mutual benefit for both PNG and Japan that a reliable Japanese company was fully involved in the new LNG project. In other words, participation by JX is an important step to a win-win situation for both PNG and Japan, where the former is seeking stable export destinations and the latter is seeking stable suppliers of energy."

Satoshi also emphasised that JX Nippon's acquisition of an operating stake in Papua LNG strengthens the PNG-Japan relations practically. "The Papua LNG project would be the firm's fourth LNG project," Satoshi mentioned, citing JX Nippon's experience and expertise in the industry.

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