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PNG and Total Sign Papua LNG Project Agreement



Following the signing of the Fiscal Stability Agreement (FSA) for the Papua LNG Project between the Papua New Guinea government and with French company Total and partners ExxonMobil and Oil Search, Prime Minister James Marape has announced that the Papua LNG project will proceed as a two-train project, independently of the P’nyang project.

This came after a twenty-two months delay after landowner issues and a change in government leadership. The initial Memorandum of Understanding was signed in early 2019.

“This demonstrates that the government can still honour legally-signed agreements which in the long run provides comfort for long-term investors,” he said. “It demonstrates Papua New Guinea’s commitment to this Papua LNG Project and gives comfort and encouragement to the developers to progress the project.”

According to Petroleum Minister Kerenga Kua, the long incubation period was because of exploring whether this project will connect with the fledgeling P’nyang project in Western Province.


"After 22 months it was felt that we should de-link the two projects," he said. "Papua LNG, because it's a fully executed agreement, is capable of proceeding as a stand-alone project. And P'nyang can follow its own pace after this event."

He assured landowners that they would get a fair share from the project.

“I want to assure everybody that this process is at an advanced stage,” he said. “Landowner identification has been substantially completed. However, the project developer cannot bring it to my level at the department for the final vetting partly because there is an injunction sitting there somewhere, stopping the company Total from presenting their studies to me. Now that we have achieved this, we will now put our focus back to the National Court proceedings. I want to assure the landowners in the Gulf and Central that we will do everything possible to hear them out and make sure that the processes are fast-tracked.”

Kua added that this agreement would enable the Front End Engineering & Design (FEED) to proceed, with the Construction phase to follow in time.

For Managing director Jean-Marc Noiray, the economic benefits of the projects would come to fruition after the construction phase.

“We need to embark on the whole stabilisation of the project which we call the pre-FEED. We are working hard on that,” he said. “The FEED itself will last between 15 and 18 months, from the moment we reach the final investment decision. And from final investment decision to first gas, we have about four years of construction. It’s a long journey before we get to the first gas and the first revenues for the developers and the country.”

He added that the project is a long journey.

“It was a milestone as we achieved solid steps along the way,” he said. “By signing the stability agreement today (yesterday), we are building a solid foundation and also a confirmation that we can now go ahead.”

The new project was recently signed at the Government House in Port Moresby. In attendance were Kua, Prime Minister James Marape, and representatives from Exxon Mobil, Total, and Oil Search.

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