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“Papua LNG remains on track for FID decision in the fourth quarter of 2026 with key regulatory approvals secured and the government-led Development Forum having commenced in July, a key milestone ahead of FID,” Santos said in its second-quarter results report on Thursday.
TotalEnergies has a 37.55 percent operating stake in the Papua LNG project, ExxonMobil has 37.04 percent, Santos owns a 22.83 percent interest, and JX Nippon holds 2.58 percent.
In April 2024, the partners delayed the project’s FID to 2025, saying that they needed to keep working with contractors to obtain “commercially viable” EPC contracts.
TotalEnergies CEO Patrick Pouyanne said in April this year that the partners are making progress towards FID, which is expected in the second half of this year.
Earlier this year, Japan’s JGC and South Korea’s Hyundai Engineering & Construction said that they have been selected as the engineering, procurement, and construction (EPC) contractor candidate for the TotalEnergies-led Papua LNG project.
The final EPC contract award is expected after the project’s FID in 2026, according to JGC.
Under this project, JGC and Hyundai E&C will form a joint venture to construct the LNG production plant in Port Moresby, using natural gas feedstock from the Elk-Antelope gas fields in Papua New Guinea.
According to JGC, EPC services are for an LNG plant with an annual capacity of approximately 4 mtpa, ot three 1.33 mtpa trains.
The facility will be built adjacent to the existing PNG LNG processing facilities, operated by ExxonMobil and located 20 kilometers northwest of Port Moresby.
Barossa
Santos also provided an update on its Barossa project in Australia.
In January, Santos shipped the first Darwin LNG cargo produced from the Barossa gas field to Japan.
However, the project’s floating storage and offloading facility (FPSO) experienced issues during commissioning.
“The Barossa FPSO facility recommenced stable production following completion of flushing and cleaning activities on the heat exchanger trains. During the quarter, production ramped towards plateau, and Barossa is now producing at 97 percent of planned rates,” Santos said in the quarterly report.
“Four LNG cargoes were successfully loaded during the quarter with two of those being loaded in June by Santos and sold on a delivered ex-ship (DES) basis, with the revenue recognized and proceeds due to be received shortly after quarter end,” the company said.
“A further three cargoes were loaded during July, at a current cadence of a cargo approximately every eight days,” Santos said.
Results
Santos reported second-quarter sales revenue of $1.35 billion, compared with $1.29 billion a year earlier, and $1.27 billion in the prior quarter.
The company reported production of 23.1 mmboe for the second quarter, a three per cent increase on the prior quarter, with first-half production of 45.6 mmboe.
Santos said its second-half production is expected to increase around 20 to 30 percent on the first half.
The company said that realized LNG pricing was $11.21 per mmBtu during the quarter, up 4.9 percent on the prior quarter.
This was achieved despite the first quarter JCC price averaging $67 per barrel – the lowest JCC price since 2022, according to Santos.
The majority of Santos’ LNG contracts reflect sales on an industry-standard three-month pricing lag.
JCC average pricing has subsequently lifted to more than $100 per barrel in the second quarter of 2026, which is expected to drive higher realized LNG pricing and cash flow in the third quarter, Santos said.
