Santos sells 2.6 percent stake in PNG LNG to Kumul

Australian LNG player Santos has signed a binding deal to sell a 2.6 percent stake in the PNG LNG project to Papua New Guinea’s national oil and gas company Kumul Petroleum.

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 Australian firm said in a statement on Friday it has executed a binding sale agreement to deliver Kumul a 2.6 percent participating interest in PNG LNG for a total purchase consideration comprising cash of $576 million and the assumption of about $160 million of project finance debt.

Moreover, Santos said completion of the deal is not subject to finance and is conditional only on the approval of the PNG competition regulator on or before December 31, 2023.

Kumul has paid $80 million into escrow with Santos as part payment of the purchase consideration under the sale agreement.

Also, Kumul has undertaken to make further pre-payments of the purchase consideration into escrow throughout the period up until completion, Santos said.

Option for a further 2.4 percent stake

In addition to the sale, 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, it said.

Kumul must exercise the option on or before June 30, 2024.

The option exercise remains subject to completion of the sale agreement and the satisfaction of customary conditions, including necessary regulatory approvals and third-party consents, Santos said.

Santos managing director and CEO, Kevin Gallagher, welcomed the binding agreement with Kumul on the sale of up to 5 percent of PNG LNG.

“This re-structured transaction is a pragmatic solution that provides a clear pathway to completion and builds our strategic alignment with Kumul and our long friendship with PNG, where Santos has been a committed corporate citizen for over 40 years,” Gallagher 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.

Most Popular

Venture Global to introduce gas to tenth Plaquemines liquefaction block

US LNG exporter Venture Global LNG has received approval from the US FERC to introduce natural gas to the tenth liquefaction block at the Plaquemines LNG terminal in Louisiana as part of the plant’s commissioning process.

Eni: third phase of YPF’s Argentina LNG project requires $20 billion investment

The third phase of YPF's Argentina LNG export project would require an investment of about $20 billion, according to Eni’s COO of global natural resources, Guido Brusco.

Kimmeridge’s Commonwealth LNG seeks expedited approval from FERC

Kimmeridge's Commonwealth LNG is seeking expedited final approval from the US FERC as it looks to make a final investment decision on its planned LNG export plant in Louisiana later this year.

More News Like This

Santos: PNG LNG shipped 28 cargoes in Q1

The ExxonMobil-operated PNG LNG project in Papua New Guinea shipped 28 cargoes of liquefied natural gas in the first quarter of 2025, up by one cargo compared to the same quarter last year and one cargo less compared to the prior quarter, according to shareholder Australia’s Santos.

Santos: Barossa project 95.2 percent complete

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is 95.2 percent complete and remains on target for first production in the third quarter of 2025, Santos said on Thursday.

Santos says Barossa project 91 percent complete

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is 91 percent complete and remains on target for first production in the third quarter of 2025, Santos said on Wednesday.

TotalEnergies CEO says partners working hard on Papua LNG

TotalEnergies has a 37.55 percent operating stake in the Papua LNG project, ExxonMobil has 37.04 percent, Santos owns a...