KUMUL APPLAUDS SECOND LNG SIGNING

“The execution of these complex agreements is a critical milestone which now allows the Joint Venture Partners to move down the path to develop the Elk/Antelope fields in the Gulf Province."

Papua New Guinea’s National Oil and Gas Company (NOC) Kumul Petroleum Holdings Limited (KPHL) has expressed satisfaction and congratulated all the parties involved with the Papua LNG Gas Agreement signed between the State and Joint Venture Partners.

The Papua LNG Gas Agreement was signed for the Government by the Minister for Petroleum, Dr Fabian Pok, the TOTAL SA Chairman and Snr Vice President, Javier Rielo, the Oil Search Executive General Manager, Gerea Aopi, and the ExxonMobil PNG Managing Director, Andrew Barry.

In addition to the Gas Agreement, three downstream Operating Agreements were signed by the Joint Venture Partners – the Facilities Access Agreement (FAA), the Downstream Operations and Cooperation Agreement (DOCA) and the Cost Sharing Agreement (CSA).

These agreements will allow the Papua LNG downstream facilities to be built and operated inside the current PNG LNG facility area near Port Moresby, allowing the two Projects to share infrastructure and reduce costs. This will avoid any unnecessary duplication in construction as recently seen in Gladstone on the Australian East Coast, where three identical independent downstream facilities were built next to each other, vastly increasing their overall cost and reducing the tax revenues.

The Managing Director for KPHL, Wapu Sonk, warmly congratulated the O’Neill government and the other parties for bringing Papua New Guinea’s second LNG project one step closer to fruition.

“The execution of these complex agreements is a critical milestone which now allows the Joint Venture Partners to move down the path to develop the Elk/Antelope fields in the Gulf Province.

“KPHL will become a party to the Gas Agreement when we exercise our back-in rights when the Development License is issued, so we have been working with the other stakeholders negotiating the Agreement, as is provided for in the Kumul Act. We are particularly pleased that the Joint Venture Partners have agreed to assist Kumul Petroleum by way of carry and that brings certainty to KPHL exercising its full equity entitlement of 22.5%, of which 2% will be carried by KPHL for the Land Owners. This will allow benefits to flow though KPHL to the State right from the beginning of production.

“We are also delighted that this Gas Agreement includes provisions to supply gas to the domestic market at competitive prices, as well as providing conditional access to the Project pipelines to other developers. The inclusion of these two items is critical for KPHL’s unrelenting electrification campaign to help the State reach its target of connecting 70% of households by 2030.”

Press Release
April 10, 2019