Central Province has rejected the proposed Papua LNG benefit-sharing arrangements, seeking a 55-45 split with Gulf Province and arguing that its role as a co-host warrants a greater share of the project’s economic benefits.
Central Gov. Rufina Peter presented the province’s Tier 1 position paper at the Papua LNG Forum in Port Moresby on Sept. 4, 2026. She later handed the document to Petroleum Minister Jimmy Maladina.
The Papua LNG benefit package under discussion is valued at K6.605 billion. It includes legislated benefits such as royalties, equity and development levies, as well as negotiated benefits including business development grants, infrastructure development grants and high-impact infrastructure projects.
The benefits would be shared among landowners, provincial governments, district development authorities and local-level governments in Gulf and Central provinces.
Central has rejected the director’s proposed allocation of 70% of legislated benefits to Gulf and 30% to Central, as well as an 80-20 split of negotiated benefits. Instead, it wants Gulf to receive 55% and Central 45% across all benefit streams.
Central challenges benefit calculations
The director’s proposal was based on project-impacted population, the number of affected clans, the physical area affected and capital expenditure. Central said those factors produced a 66-34 split, rather than the proposed 70-30 allocation for legislated benefits.
After reviewing the data, the province said it identified missing information and inaccuracies, including the population of Kairuku LLG, the number of clans in Central and the allocation of midstream capital expenditure.
Central said including Kairuku’s population of 29,485 increased its project-impacted population to 47,906, while the number of affected clans rose to 101.
It also disputed the allocation of midstream capital expenditure. The province said the component was recorded at US$2.465 billion but estimated that only US$783.4 million should be attributed to Central, based on 5% of the project’s total capital expenditure of US$15.6687 billion.
Central said its revised calculations produce a 58-42 split, which it considers a more equitable, data-based allocation.
Peter said Papua LNG should not be assessed solely by the location of gas resources and other physical impacts. She said the project extends from the wellheads to the export facilities, making Central a co-host rather than simply a project-impacted province.
Central’s case also rests on the use of existing PNG LNG facilities at Caution Bay, which will be integrated into Papua LNG. Peter said this integration has helped make the project economically viable and is expected to save developers about US$3.5 billion.
The project’s estimated cost was initially about US$18 billion before being reduced to approximately US$14.5 billion following the re-scoping and re-tendering of engineering, procurement and construction contracts, according to the position paper.
Central argues that the economic value of hosting processing, liquefaction, storage and export facilities should be reflected in the benefit-sharing arrangements.
The province is also seeking K2.2 billion for a 25-year infrastructure programme, citing population growth, migration and increased pressure on infrastructure and services. Peter said Central’s role as a gateway to the National Capital District means the investment would benefit residents as well as people who live, work and travel through the province.
Central proposes wider economic participation
Central wants the K1.228 billion reserve benefits package included in the current negotiations and divided equally between Gulf and Central. It is also seeking a 50-50 split of the 40% commercial equity associated with Papua LNG.
The province wants the commercial equity known as “Lakatoi Equity,” reflecting the historical relationship between Gulf and Central through the Hiri Trade.
Central is also seeking greater participation in opportunities arising from the project’s 5% domestic market obligation, or DMO. It proposes that Gulf and Central have the first opportunity to participate in DMO-related businesses through a joint-venture special purpose vehicle.
The province has further called on the state to share 20% of the 2% production levy with Central. Peter said the additional revenue would help fund infrastructure needed to serve the province’s growing population and the wider national community.
Another proposal is a dedicated Papua LNG-Central GST code through the Internal Revenue Commission. Central said the mechanism would allow it to capture GST generated by businesses operating in the province during the project’s construction and operational phases, including businesses based in the National Capital District that conduct substantial activity in Central.
Central also wants stronger governance and accountability measures in the Development Agreement. It has called for business development grants, infrastructure development grants and high-impact infrastructure projects to be clearly allocated according to the agreed Tier 1 arrangements.
The province also wants the Extractive Industries Transparency Initiative included in the agreement to strengthen transparency in the disbursement and management of project funds.
It has proposed an umbrella company for plant-site villages to participate in project contracts, along with a new trust entity under the Mineral Resources Development Company for those villages.
Peter said Central presented its position in good faith and wants negotiations with Gulf Province and the National Government to proceed amicably. She called for Tier 1 negotiations to conclude quickly so that Tier 2 and Tier 3 talks can begin before the Dec. 15, 2026, final investment decision deadline.
Central’s position seeks not only a larger share of Papua LNG benefits, but also longer-term participation through equity, domestic gas opportunities, GST revenue, infrastructure funding and stronger governance arrangements.
