Papua New Guinea’s Kumul Petroleum Holdings has once again extended the period for the binding conditional offer made to Australian energy company Santos to acquire a 5% interest in PNG LNG for an asset value of $1.4 billion.
The offer will remain open until 31 August 2023, and Santos said it has agreed to deal exclusively with Kumul during this period.
Santos further noted that Kumul has agreed it will work closely with Santos during the extension period in order to assist it in arranging the finalisation of its acquisition financing with third parties, adding that there is also strong support from both the government and the joint venture partners for the transaction proceeding.
Santos Managing Director and CEO Kevin Gallagher said PNG LNG continues to represent compelling value for shareholders, adding: “With the significant changes in the global energy landscape over the last 12 months, PNG LNG remains a world-class asset that is low-cost, low emissions intensity and delivers reliable LNG supply to our customers in Asia.”
“The project is positioned in a supportive regulatory environment, with fiscal stability arrangements in place ensuring that it contributes strong cash flows to project participants and delivers significant economic and social benefits to the nation. While the PNG project is a very valuable asset and Santos’ balance sheet is strong, Santos remains committed to selling 5% equity in the project to support the PNG government to achieve the nation’s equity objectives.”
Prime Minister of Papua New Guinea James Marape stated: “I am fully supportive of continuing the transaction to purchase 5% of PNG LNG in pursuing PNG national interest and its nation-building programmes. Given the volatility in the financial markets and the high-interest rate environment, I support Kumul’s request for a time extension to complete the transaction. With credible private sector lenders significantly advanced, I am confident that Kumul will secure an appropriate financing package.”
To remind, the initial offer was made in September 2022, and in December 2022, Kumul extended it until 30 April 2023.