The Papua LNG project, a major liquefied natural gas development in Papua New Guinea, is progressing toward a final investment decision (FID) targeted for mid-2026. The project, operated by TotalEnergies, involves developing the onshore Elk and Antelope gas fields and connecting them via pipeline to new liquefaction trains at the existing PNG LNG facility.

Project Ownership and Status

The ownership consortium consists of TotalEnergies (37.55%), ExxonMobil (37.04%), Santos (22.83%), and JX Nippon (2.58%), with the PNG state holding a back-in right to a 22.5% interest. TotalEnergies' CEO, Patrick Pouyanne, stated the aim is to sanction the project by mid-2026, but noted this is not guaranteed as several workstreams—covering capital expenditure, financing, and marketing—must converge.

Optimized Capital Expenditure

A key development is the significant optimization of the project's estimated capital expenditure. The cost has been reduced to a range of $14 billion to $15 billion, down from a previous estimate of $18 billion. Pouyanne indicated this optimized figure is acceptable to TotalEnergies, stating they do not see how it could be improved further.

Stakeholder Perspectives and Priorities

Santos CEO Kevin Gallagher expressed pleasure at the clarified cost position and confirmed that achieving FID for Papua LNG is Santos's fourth-highest business priority. He affirmed that all partners—Santos, ExxonMobil, and TotalEnergies—are working towards a mid-2026 FID, with remaining issues being ironed out.

Outstanding Challenges and Requirements

Despite progress, major in-country hurdles remain before sanctioning. The most critical is the landowner forum, a complex negotiation process between the PNG state and local stakeholders to agree on a benefit-sharing package. FID cannot proceed until this agreement is finalized. This process is intricate due to significant financial sums involved, as evidenced by the existing PNG LNG project's structure where dividends are paid to the government and landowners under similar agreements.

Project Resources and Current Activities

The Elk and Antelope fields hold substantial resources, estimated at approximately 6.5 trillion cubic feet of gas and 57 million barrels of condensate. These will feed LNG production capacity of about 5.6 million tonnes per annum. Concurrently, tendering activities for major engineering, procurement, and construction contracts are ongoing.