Santos sells Papua New Guinea LNG stake for $576 million

World Oil Staff September 01, 2023

(WO) – Santos has executed a binding sale agreement to deliver Kumul Petroleum Holdings Limited (Kumul) a 2.6% participating interest in PNG LNG, for a total purchase consideration comprising cash of $576 million and the assumption of ca. $160 million of project finance debt (the Sale Agreement).

In addition, Santos has agreed to grant Kumul a call option to acquire a further 2.4% participating interest in PNG LNG for a cash purchase price of $524 million (plus a proportionate share of project finance debt) (the “Call Option”).

Santos Managing Director and CEO Kevin Gallagher said, “This re-structured transaction is a pragmatic solution that provides a clear pathway to completion and builds our strategic alignment with Kumul and our long friendship with PNG, where Santos has been a committed corporate citizen for over 40 years,” Mr Gallagher said.

“PNG LNG is a low-cost and low emissions intensity asset that contributes strong cash flows to the project participants and economic and social benefits to the nation.”

PNG Prime Minister James Marape welcomed the Agreement, saying, “This transaction will increase Kumul’s interest in PNG LNG and supports the PNG government objectives for the people of PNG to have a greater equity interest in the development of their natural resources.”

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