Kumul Petroleum plans to grab full rights on LNG projects

Business

By PETER ESILA
KUMUL Petroleum Holdings Ltd (KPHL) will exercise its full equity rights of 22.5 per cent in both the P’nyang and Elk/Antelope LNG projects, and the Twinza first offshore field.
Managing director Wapu Sonk said that during the PNG Petroleum and Energy Summit in Port Moresby yesterday.
“We are marketing our future equity entitlements for Papua LNG jointly with Total,” he said.
“KPHL will exercise its maximum entitlement in all projects of 22.5 per cent in all new developments (2 per cent carried for the landowners).
“There is also a third project happening and that has not been discussed much.
“Twinza has been talking to the PNG Government about developing our first offshore.
“That project is also in queue, but that will come after the two main projects.”
Sonk said KPHL would participate in these future projects.
“We intend to exercise all our 22.5 per cent equity in those developments,” he said.
“We will retain 20.5 per cent and two per cent will be free carried for landowners and the beneficiaries.
“The provincial governments, usually the State, carry the two per cent, but since the Kumul Act came into force in 2015, KPHL has the responsibility of carrying landowners and the provincial governments, up till production.
“Obviously, this requires a lot of capital raising to do, so last year, we appointed Lazard of Paris (financial advisors) which have completed an equity financing feasibility study for KPHL.
“We can be able to fully exercise our option of 22.5 per cent in those two projects and, hopefully, the offshore projects as well.”
Sonk said the three major projects were moving towards final investment decision (Fid).
He said the Total-led Papua LNG was moving forward quickly with key terms agreed and gas agreement with State expected to be finalised within a month.
Sonk said ExxonMobil was finalising development plan for P’nyang gas field, with gas agreement to be finalised in second quarter this year. He said the front-end engineering and design (Feed) on both projects was expected in the second or third quarter this year.
“Both aim to put LNG in the market in the 2024 -25 window,” Sonk said.
“Twinza is finalising plans to develop the first offshore field in PNG, which is a significant project for PNG as it is the first commercialisation of an offshore field.
“Key challenges remain, but we are confident of their resolution.”

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