TotalEnergies will delay its final investment decision on the Papua LNG project to 2025 after initial EPC contract bids were not to its liking. The operator was expected to formally green light investment in the estimated $10 billion project this year. It is unclear what effect the delay may have on the anticipated 2028 startup.
In a joint statement issued by James Marape, the Prime Minister of Papua New Guinea, and Patrick Pouyanné, chairman and CEO of TotalEnergies, Pouyanné said it “appears that the project will need to keep working with contractors to obtain commercially viable EPC contracts and requires more work to reach FID."
The project will review the structure of some packages and open the competition to an enlarged panel of Asian contractors. Pouyanné confirmed TotalEnergies, operator of the project, and its international partners ExxonMobil, Santos, JX Nippon, remain fully committed to Papua LNG. TotalEnergies said there is high interest of several LNG buyers for offtaking LNG from Papua LNG due to its strategic location close to key Asian markets.
The prime minister and Patrick Pouyanné confirmed the delay will not affect the early work planned in Papua New Guinea in 2024 and that the project will maintain its full support to the local population of Gulf Province.
The Papua LNG project will consist of nine production wells, one water injector, one CO2 reinjection well, and a gas processing plant. A 320-km pipeline connecting the processing plant to the liquefaction plant located in Caution Bay is also planned. The partners selected a concept utilizing three electrical LNG trains, a more modular solution that will reduce the project’s overall carbon footprint when combined with renewable energy. The project is planned to have an export volume capacity of 5.6 mtpa.
Design work on the upstream side of the project, involving the large Elk and Antelope field developments in the eastern Papuan Basin, began in July 2022.
Separately, TotalEnergies confirmed to the Papua New Guinea government that it intends to drill the first deepwater exploration well on the PPL 576 license next year.
