The Government has secured significant structural and financial gains for Papua New Guinea following its review of the 2019 Papua LNG Agreement, Petroleum Minister Jimmy Maladina said, asserting that the outcomes firmly favour the State despite ongoing political criticism.
Speaking on 19 March, Maladina said the review delivered “tangible outcomes in favour of the State”, a position he noted had been conceded by the project operator, directly countering claims that no progress had been made.
Central to the review are several provisions aimed at strengthening long-term national value. These include the formalisation of a National Content Plan to increase the participation of Papua New Guinean businesses and the local workforce in the project.
In addition, the project developer has agreed to maintain a minimum of US$250 million in a Bank of Papua New Guinea account to help buffer foreign exchange pressures.
The State has also secured the right to acquire the project’s pipeline infrastructure, subject to the repayment of loans and sunk costs, alongside guaranteed third-party access provisions. Furthermore, ownership of an LNG tanker to transport the State’s share of cargo will be held by Kumul Petroleum Holdings Limited.
“These are structural gains that improve long-term national value and were not in the original agreement,” Maladina said, referring to the deal negotiated in 2019.
The minister also addressed ongoing public debate surrounding project costs and alleged concessions. He rejected claims by Opposition Leader and Member for Ialibu-Pangia, Peter O’Neill, that the Government is providing a US$3 billion giveaway to developers, describing the assertion as “absolutely false”.
According to Maladina, the project’s capital cost has increased from US$12 billion to approximately US$14.5 billion — a difference of US$2.5 billion — largely due to global factors. However, through negotiations, the Government has reduced its exposure, with any support capped at less than US$2 billion and structured to be fully repaid over the life of the project.
“This is a give-and-take mechanism designed so that no party is better off than the other,” he said, reiterating that there would be “no permanent loss” to the people of Papua New Guinea.
Maladina further clarified that there will be no sovereign borrowing to finance the capital increase, and no plans to raise US$3 billion through public debt. He added that the arrangement would not place pressure on the national budget in the short to medium term, as any support would be contained within the project framework and agreed with developers.
While specific details remain subject to ongoing negotiations and pending National Executive Council approval, the minister stressed that the Government is negotiating from a “position of strength and discipline”.
He also placed the project’s delays and cost escalation in a global context, noting that the COVID-19 pandemic disrupted supply chains, financing and development timelines across the energy sector. At one stage, costs had risen to US$18 billion due to inflation and contractor pricing pressures, but the Government worked with the project operator to reduce this to approximately US$14.5 billion.
“That is a significant achievement,” he said.
Maladina underscored that the Government’s approach is balanced — aimed at protecting State value, ensuring investor returns remain viable, and advancing the project.
“If the project does not proceed, there is no revenue, no jobs and no economic benefit,” he said.
He also dismissed claims that Cabinet decisions were being rushed or influenced, stating that all processes are subject to proper scrutiny. Additionally, he cautioned against criticism of key project partners, including TotalEnergies and ExxonMobil, describing such actions as irresponsible.
The minister reaffirmed that the Government’s priority remains securing long-term benefits for Papua New Guinea through the project.
“We are ensuring that any support provided is capped at below US$2 billion and fully repaid,” he said. “We are delivering a project that will generate long-term revenue, employment and economic growth.”
“The people of Papua New Guinea should be assured that their interests remain our priority.”
