Papua New Guinea’s national oil and gas company Kumul Petroleum has secured funding to buy a 2.6 percent stake in the PNG LNG project from Australian LNG player Santos.
In September last year, Santos received a binding offer from Kumul to buy a 5 percent stake in the PNG LNG project.
Santos agreed in December to extend the exclusivity period for the sale until April 30, 2023, and extended the exclusivity period again in May until August 31, 2023.
The two firms executed a binding sale agreement for a 2.5 percent stake on August 31 and Santos said the deal is conditional on the approval of the PNG competition regulator.
The total purchase price comprises cash of $576 million and the assumption of about $160 million of project finance debt.
Besides this, Santos has agreed to grant Kumul a call option to acquire a further 2.4 percent participating interest in PNG LNG for a cash purchase price of $524 million, plus a proportionate share of project finance debt.
According to a statement by Santos issued on Friday, the PNG independent Consumer and Competition Commission (ICCC) approved the transaction, while Kumul also secured funding for the purchase.
Kumul has paid about $250 million into escrow with Santos as part payment of the purchase price, the latter said.
Additionally, Kumul has executed binding funding arrangements for the remainder of the consideration, which will be available for drawdown by January 31, 2024, Santos said.
Santos currently has a 42.5 percent stake in the 6.9 mtpa LNG export plant in Caution Bay following the Oil Search merger, while Kumul has a 16.8 percent stake.
ExxonMobil holds a 33.2 percent operating interest in PNG LNG.