Total, Kumul Ink Papua LNG Joint Sales Pact

Papua New Guinea’s national oil and gas company, Kumul Petroleum Holdings, has signed a binding agreement with Total for joint marketing of their shares of production from the future Papua LNG Project.

Under the heads of agreement signed February 9, Kumul and the French major will negotiate a shareholders’ agreement for a joint venture to be set up as the corporate vehicle, jointly staffed by Total and Kumul, to sell their combined production share of LNG and condensates from Papua LNG. The joint venture will engage potential buyers of LNG in the Asia Pacific region for the long term sale and purchase of their respective entitlements of LNG in Papua LNG.

Kumul managing director Wapu Sonk said: “This agreement to jointly market our share of the production from the Elk/Antelope field with Total, operator of the field, will allow us to develop our staff while maximising the value brought to both companies." He said he looked forward to finalising the shareholders agreement in the near future.

Total's head of gas Laurent Vivier called the February 9 agreement "an important milestone for our two companies" that would allow both companies to "leverage their respective strengths for the successful marketing and sale of the LNG from Papua LNG.”

Under PNG's 1998 Oil & Gas Act, Kumul is the state's nominee both in the existing ExxonMobil-operated PNG LNG venture (in which Kumul has a 16.57% equity stake) and will be in the Total-planned Papua LNG project, because of its stake in Elk/Antelope.

Total indicated at its 2017 results last week that it would be interested in talking to ExxonMobil about the possible merger of both LNG ventures. ExxonMobil started up PNG LNG on schedule and within budget in 2014.