Santos is set to sell a 2.6 per cent stake in the PNG (Papua New Guinea) liquified natural gas (LNG) project to local company Kumul Petroleum Holdings.
The PNG LNG project is an integrated development that aims to commercialise the gas resources of PNG. Operations at the site commenced in 2014.
A deal to sell a five per cent to Kumul has been on the cards since 2022; however, the deal has been pushed back a number of times.
Santos has now executed a binding sale agreement to deliver Kumul a 2.6 per cent participating interest in PNG LNG for a total purchase consideration comprising cash of $576 million.
Santos has also given Kumul the option to acquire a further 2.4 per cent stake in the future.
“I am pleased we’ve reached a binding agreement with Kumul on the sale of up to five per cent of PNG LNG,” Santos managing director and chief executive officer Kevin Gallagher said.
“This re-structured transaction is a pragmatic solution that provides a clear pathway to completion and builds our strategic alignment with Kumul and our long friendship with PNG, where Santos has been a committed corporate citizen for over 40 years.
“PNG LNG is a low-cost and low emissions intensity asset that contributes strong cash flows to the project participants and economic and social benefits to the nation.”
PNG Prime Minister James Marape has welcomed the announcement.
“This transaction will increase Kumul’s interest in PNG LNG and supports the PNG government objectives for the people of PNG to have a greater equity interest in the development of their natural resources”, Marape said.
