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    Santos, partners postpone Papua LNG FID to late-2025

Summary

The timeline has been pushed back from the original plan, which would have seen the FID at the end of this year.

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Liquefied Natural Gas (LNG), Security of Supply, Corporate, Exploration & Production, Import/Export, Investments, Financials, News By Country, Australia, Papua New Guinea

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Santos, partners postpone Papua LNG FID to late-2025

Australia’s Santos and its partners plan to make the final investment decision (FID) on the Papua LNG project in Papua New Guinea by the end of 2025, Santos CEO Kevin Gallagher announced during earnings call on August 21.

“We're working with the joint venture partners on Papua to reset the FEED phase of the project, as you're well aware. And the best estimate I have right now is that the joint venture will be looking to align an FID decision towards the end of 2025,” Gallagher said. “This timeline has been pushed back from the original plan, which would have seen the FID at the end of this year. So, we’re now targeting the end of 2025.”

The Papua LNG partners have selected a concept involving four electric LNG trains (e-trains) with a combined capacity of 4mn tonnes/year to be developed within the existing PNG LNG project site. Additionally, Papua LNG has secured access to up to 2mn tonnes/year of existing liquefaction capacity from PNG LNG.

Gallagher mentioned that the project concept remains largely unchanged. TotalEnergies, the operator of the upstream component of the Papua LNG project, continues to work with contractors to finalise commercial development contracts. Meanwhile, downstream operator ExxonMobil is working to ensure that all key stakeholders are engaged and that regulatory permits are awarded.

“There are optimisations, design optimisations that we're working on with the joint venture to reduce the project’s capex, but the 2mn tonnes aspect remains the same,” he noted.

The partners had last year launched a fully-integrated FEED for the Papua LNG project. Santos holds a 22.8% interest in Papua LNG along with joint venture partners TotalEnergies (40.1% and operator) and ExxonMobil (37.1%).

The state of Papua New Guinea may exercise a back-in right for up to a 22.5% interest at the final investment decision, which is planned for the end of 2023 or early 2024. Should Papua New Guinea exercise its full back-in right, Santos' interest in the project would reduce to 17.7%.

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