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TotalEnergies nears Papua LNG investment decision after cost cuts, Exxon deal

TotalEnergies announced on Monday that it had cleared a number of?commercial and contractual hurdles in its Papua LNG Project, bringing the project closer to a decision.

The French energy giant said that it had completed the tendering process for the engineering, procurement, and construction work of liquefied gas facilities. Contracts are now awaiting approval from its joint-venture partners.

TotalEnergies reported that by rebidding?contracts and optimising project design, they have been able to save close to $4 billion in costs since 2024. This has brought down the capital spending?to?around $14 billion.

ExxonMobil already operates the nearby PNG LNG plant. The company has handed over the project's operations to ExxonMobil. TotalEnergies is also selling a 9.1% stake to its partners, while retaining a 20 percent stake and keeping the LNG offtake share.

The companies have also finalised a revised gas agreement with the Papua New Guinea government. They've set up a joint venture to market LNG with Kumul Petroleum, to sell 2.4 million metric tonnes per year (Mtpa), of the project's output of 5.6 Mtpa. TotalEnergies has also signed an offtake contract to access 1.5 Mtpa for its own portfolio.

TotalEnergies' CEO Patrick Pouyanne stated in July that he aimed to make a final decision on investment by November.

(source: Reuters)