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Update: TotalEnergies Approaches FID Stage on Papua New Guinea LNG

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(Updates with Santos' deal to buy further stake in project in the fifth paragraph.)

France's TotalEnergies (TTE) has reached some contractual and commercial milestones on a Papua New Guinea liquefied natural gas project, taking it closer to final investment decision, the company said in a statement on Monday.

It said an engineering, procurement and construction tendering process had been completed and recommendations submitted to co-investors for approval. The company said $4 billion in savings had been made since 2024 by altering the project design.

These include an alternative upstream condensate scheme and rebidding EPC packages to include more Asian contractors, lowering the expected capital cost to about $14 billion.

The decision was also taken to make Exxon Mobil (XOM) the project operator and for TotalEnergies to transfer 9.1% of its stake in the project to its Papua LNG partners, leaving Total with a 20% stake in the project but with no change to its LNG offtake share of 1.5 million tons per annum.

Fellow stakeholder Australia's Santos will buy an additional 3.3% stake in the project from Total for $189 million, it said in a separate statement, conditional on obtaining regulatory approval and on a final investment decision being taken. Santos will then own a 21% stake in the project, it said.

An LNG marketing joint venture has been established between TotalEnergies and the Papua New Guinea government entities, represented by Kumul Petroleum Holdings. They will jointly commercialize 2.4 Mtpa of LNG, just under half the project's annual output of 5.6 million Mtpa.

Exxon Mobil will hold a 34.1% stake in the project upon completion of Total's farm-down.

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