Santos Ltd. will increase its participating interest in the Papua LNG project to 21% after agreeing to acquire an additional 3.3% stake from TotalEnergies as part of a broader restructuring of the project's ownership and operatorship.
TotalEnergies has agreed with ExxonMobil to transfer operatorship of Papua LNG to ExxonMobil PNG Antelope Limited, while partially selling down its participating interest to the other Papua LNG joint venture partners in proportion to their existing interests.
Santos said it has executed a binding agreement to acquire the additional 3.3% participating interest, calculated after the Papua New Guinea state's back-in, in PRL 15 and the Papua LNG project for approximately US$189 million.
The transaction remains subject to regulatory approvals and the project reaching a Final Investment Decision (FID), currently planned for the fourth quarter of 2026. If completed, the acquisition will be effective from Jan. 1, 2026.
Santos expects the additional interest to increase its equity LNG production from Papua LNG by about 19% to approximately 1.2 million tonnes per annum (Mtpa).
The company said the acquisition is consistent with its strategy of disciplined, value-accretive growth around existing infrastructure and increasing exposure to Asian LNG demand.
ExxonMobil to operate Papua LNG
The proposed operatorship transfer would give ExxonMobil responsibility for Papua LNG while it continues to operate the existing PNG LNG project, a move Santos expects to generate operational synergies and strengthen project execution.
Santos Managing Director and CEO Kevin Gallagher said the transaction would better align the company's interests across PNG LNG and Papua LNG ahead of the planned FID.
“The Papua LNG project is a world-class development, strategically positioned to supply premium Asian markets and offering multiple value streams for Santos,” Gallagher said.
“ExxonMobil brings a proven track record of project delivery and reliable operations in Papua New Guinea, including PNG LNG, and is expected to realise significant synergies by operating both the upstream and midstream project scopes.”
Gallagher said Santos was prepared to increase its investment in Papua LNG because of the project's expected long-term production profile.
“Papua LNG is a world-class project and this is the right time to increase our position,” he said.
Santos said the proposed changes to equity interests and operatorship would improve alignment among the Papua LNG and PNG LNG joint venture participants.
FID remains key milestone
Completion of Santos' acquisition remains conditional on regulatory approvals and Papua LNG achieving FID.
Santos said it will provide the market with an update at FID on the project's cost, schedule and economics.
The transaction comes as Papua LNG moves toward its targeted FID in the fourth quarter of 2026, a key milestone for the proposed development and its future LNG production capacity in Papua New Guinea.
Santos also acknowledged TotalEnergies for its work advancing Papua LNG over the past decade and said the project remains on track for FID later this year.
