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Santos has obtained a proposal from Papua New Guinea’s (PNG) nationwide oil and fuel firm Kumul Petroleum to amass a 5% stake within the former’s $19bn PNG liquefied pure fuel (LNG) mission, positioned close to Port Moresby, for roughly $1.4bn.
The consideration of the binding conditional supply features a proportionate share of mission finance debt of practically $300m.
Kumul Petroleum presently holds a 16.8% stake within the PNG LNG mission, which has fuel manufacturing and processing services that reach from the Hela, Southern Highlands, Western, and Gulf provinces to Port Moresby in Central Province.
Upon completion of the potential transaction, Santos’ stake within the mission will likely be decreased to 37.5% whereas boosting Kumul’s stake to 21.8%, reported Reuters.
Santos will now negotiate a heads of settlement with Kumul Petroleum to additional work on the event of the latter’s regional capability and functionality.
Santos managing director and CEO Kevin Gallagher mentioned: “PNG LNG is a low-cost and low emissions depth asset that contributes robust money flows to the mission members and financial and social advantages to the nation.
“Following the transaction, Santos would preserve a 37.5% curiosity on this world-class mission. Santos has been a dedicated companion in PNG for over 40 years, concerned in additional than 30 totally different licenses and has important group partnerships and tasks throughout the nation.”
In an effort to safe the supply, Kumul made a $55m fee, which will likely be held in escrow. The quantity will likely be launched as a deposit to Santos for partial fee of the supply consideration if it accepts the proposal.
Santos additionally agreed to deal completely with the PNG oil and fuel agency till 31 December 2022, concerning the stake sale within the LNG mission.
The opposite companions within the PNG LNG mission are ExxonMobil, holding an operatorship stake of 33.2%; PNG state-owned Mineral Sources Growth, with a 2.8% curiosity; and JX Nippon, with a 4.7% stake.
The supply is topic to Kumul Petroleum securing the waivers of some pre-emptive rights by the opposite companions of the PNG LNG mission below the mission working settlement.
The PNG LNG built-in mission contains fuel manufacturing, processing, and liquefaction services, in addition to onshore and offshore pipelines.
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