Santos Ltd. is on track to take fourth-quarter 2026 final investment decision (FID) on the 5.6 million tonne/year (tpy) Papua LNG plant at Caution Bay, Papua New Guinea, with project financing and government-led development discussions advancing. At plateau, Papua LNG would contribute about 1 million tpy of Santos equity LNG and roughly 11 million boe/year of equity oil, the company said in its first-half 2026 earnings report and call.
Papua LNG would use 4 million tpy of production from new electric liquefaction trains and as much as 2 million tpy of tolling production from ExxonMobil Corp.’s already operating 8-million tpy PNG LNG plant, in which Santos is also a partner. Santos recently took FID on its PNG LNG oil infill drilling campaign, and expects to start drilling fourth-quarter 2026.
Santos said it has several options to backfill PNG LNG production if Papua LNG does not proceed but emphasized that all parties remain focused on reaching a Papua LNG FID this year. The company cited Muruk, P’nyang, and Usano as possible resources for such backfill.
Muruk has estimated natural gas resources of 1-3 tcf and P’nyang estimated recoverable reserves of 4.36 tcf. Usano, in the PD-L2 production license area, is primarily an oil project, with an estimated 85 million bbl of oil in place but would produce associated gas as well. Santos plans to drill a test well on it in early 2028.
TotalEnergies SE holds 40.1% interest in Papua LNG and it the project’s operator. ExxonMobil holds 37.1% interest, with Santos and the state holding the bulk of the balance. Santos equity is 17.7-22.8% depending on government exercise of its back-in rights. ENEOS (formerly JX Nippon) holds a minor participating interest.
