The Papua New Guinea (PNG) government and Total have signed a fiscal stability agreement for the Papua LNG project, nearly two years after signing a gas agreement.
PNG’s Prime Minister James Marape said that the fiscal stability agreement will have the same terms as agreed by the parties in the gas agreement announced in April 2019.
Marape was quoted by Reuters as saying: “It demonstrates Papua New Guinea’s commitment to the Papua LNG Project and gives comfort and encouragement to the developers to progress the project.”
The gas agreement has a Domestic Market Obligation (DMO), under which the project is obliged to provide gas for sustainable future domestic usage in the country. It also includes a deferred payment mechanism for PNG’s payment of past costs.
Apart from that, the agreement includes National Content to support local workforce development.
The Papua LNG project will have a capacity of producing 5.4 million tons per annum (Mtpa) of liquefied natural gas (LNG). It will be made up of two LNG trains with a capacity of 2.7Mtpa each.
The LNG project is expected to unlock more than one billion barrels of oil equivalent of natural gas resources from the Elk and Antelope onshore fields, which are operated by Total.
It will be developed in synergy with the PNG LNG project operated by ExxonMobil by expanding the existing plant in Caution Bay.
After releasing Total’s quarterly results recently, the company’s chief executive Patrick Pouyanne told reporters in Paris that a development decision on the Papua LNG project is expected to be made in 2022.
