The government of Papua New Guinea said it will honor the Papua LNG gas agreement that the previous administration signed with French oil major Total SA in April, according to a Sept. 3 release from project partner Oil Search Ltd.
In a statement, Papua New Guinea Minister of Petroleum Kerenga Kua said the government cleared Total to proceed with the project.
Total agreed to build third party access points, negotiate with third parties that want access to the project's pipelines, and negotiate with the government on a potential stake in the pipelines after the state has repaid all its loans and costs on the project.
Total also formed a joint venture with Papua New Guinea's national oil and gas company Kumul Petroleum Holdings Ltd. in order to market their shares. The partners agreed to evaluate the prospect of using LNG carriers in a joint venture with the government for transporting Kumul's shares of the cargoes through negotiated "arm's length contracts."
In mid-August, Papua New Guinea's Ministry of Petroleum sent a team to Singapore to renegotiate the terms of the Papua LNG gas agreement, which the ministry regarded as disadvantageous to the country.
However, the agreement is key to the development of the 5.4 million-tonne-per-year Papua LNG project, which is expected to take a final investment decision in 2020 and begin operations in 2024.
