Kumul secures funding for 2.6% stake in PNG LNG project

Kumul Petroleum, a state-owned entity in Papua New Guinea (PNG), has successfully secured funding to acquire a 2.6% stake in the PNG LNG project from Australia's Santos, the Australian company said on December 29. 

The initial sale was announced by Santos earlier in the year, involving a total sum of $736mn. This includes a cash component of $576mn and the assumption of approximately $160mn in project finance debt. Santos had in September 2022 received a binding conditional offer from Kumul for the acquisition of a 5% interest in the PNG LNG project for a total asset value of $1.4bn. This valuation included a proportionate share of the PNG LNG project finance debt, estimated at around $300mn.

Kumul has already paid $250mn into escrow with Santos as part of the purchase price. The remaining funds are expected to be available for drawdown by January 2024, as per the binding funding arrangements.

The transaction has received approval from the PNG Independent Consumer and Competition Commission (ICCC), meeting the only condition precedent to the deal.

The PNG LNG joint venture comprises operator ExxonMobil (33.2%), Santos (42.5%), Kumul Petroleum (16.8%), JX Nippon Oil (4.7%) and the PNG landowner company MRDC (2.8%). Santos became the largest shareholder in PNG LNG with its takeover of Oil Search.