Santos’ PNG LNG sell-down period with Kumul extended

Kumul Petroleum Holdings Ltd.’s binding conditional offer period to acquire 5% interest in the PNG LNG project from Santos Ltd. has been further extended to remain open until Aug. 31, 2023.

Santos has agreed to deal exclusively with Kumul, Papua New Guinea’s national petroleum entity, during this time.

The extension follows notification from Kumul on Dec. 23, 2022, extending the offer period Apr. 30, 2023.

The deal, originally announced in September 2022, put the 5% asset value at $1.4 billion and includes a proportionate share of PNG LNG project finance debt of about $300 million (OGJ Online, Sept. 27, 2022).

Kumul has agreed to work closely with Santos during this second extension to assist in finalizing acquisition financing with third parties.

The transaction has full approval of the PNG LNG joint venture partners as well as the Papua New Guinea government.

Santos remains committed to selling the 5% project stake to support the PNG government in achieving the nation’s equity objectives, the company said.

PNG Prime Minister James Marape said that given the volatility in the financial markets and the high interest rate environment, he supports Kumul’s request for an extension to complete the transaction.

Currently, ExxonMobil, as PNG LNG operator, holds 33.2% interest and Santos holds 42.5% interest. Other partners are Kumul (16.8%), JX Nippon Oil & Gas Exploration (4.7%), and Mineral Resources Development Co. Ltd.—representing PNG landholders— (2.8%.).