TotalEnergies will sell a 9.1% stake in the Papua LNG project in Papua New Guinea to its partners and transfer operatorship to ExxonMobil, the French energy company said on Monday.
The transaction will leave TotalEnergies with a 20% interest in the $14 billion project, with the stake being sold to existing partners in proportion to their holdings.
Australia’s Santos will acquire an additional 3.3% for $189 million, increasing its interest to 21% and raising its equity LNG production by about 19% to around 1.2 million metric tons per year.
Papua LNG, located in Papua New Guinea’s Gulf Province, is designed to produce 5.6 million metric tons of LNG per year from the Elk and Antelope gas fields, mainly for Asian markets.
ExxonMobil, which already operates the neighbouring PNG LNG project, will assume operatorship to improve coordination, execution efficiency and development of the country’s gas resources.
The transaction is subject to Papua LNG reaching a final investment decision, which Santos expects in the fourth quarter of 2026, while TotalEnergies said key contractual and commercial hurdles had been cleared.
TotalEnergies said it had completed the tendering process for engineering, procurement and construction work, with contracts awaiting approval from its partners.
Project capital costs have been reduced to about $14 billion after nearly $4 billion in savings since 2024 through contract rebidding and changes to the project design.
The partners have also agreed to an amended gas agreement with Papua New Guinea’s government and established an LNG marketing venture with Kumul Petroleum.
The marketing venture will sell 2.4 million metric tons of LNG annually, while the broader deal strengthens ExxonMobil’s role in Papua New Guinea’s LNG sector and allows TotalEnergies to reduce its exposure while retaining a significant stake.