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    PNG's Kumul enters spot market with first LNG sale


The LNG has been sold to PetroChina International Corporation. [Image: Kumul]

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Liquefied Natural Gas (LNG), Corporate, News By Country, China, Papua New Guinea

PNG's Kumul enters spot market with first LNG sale

Papua New Guinea's (PNG) state-owned oil and gas company, Kumul Petroleum, on April 18 announced its inaugural direct sale of LNG on the spot market. This deal marks the first time Kumul has independently marketed a portion of its LNG entitlement from the PNG LNG project, venturing beyond long-term sales contracts. 

The deal, which was confirmed last month, is to sell 144,000 m3 of LNG on FOB terms to PetroChina International Corporation. Kumul currently holds a 16.77% stake in the PNG LNG project, translating to roughly 14 LNG cargoes they can sell on the spot market over the next four years.

“Also, once we conclude the acquisition of an additional 2.6% of the PNG LNG project, this will provide us with more LNG to sell on the spot market,” Kumul managing director Wapu Sonk said.

Kumul is finalising the acquisition of an additional 2.6% stake from Santos. It agreed to purchase the stake in the PNG LNG project for $736mn, encompassing both a cash component and the assumption of project debt. The initial sale announced by Santos includes a cash component of $576mn and the assumption of approximately $160mn in project finance debt. 

Santos in February this year announced an amendment to the agreement with Kumul regarding the sale of a 2.6% stake in PNG LNG, allowing the latter to pay for a partial shareholding.

Kumul has paid $352mn to Santos, representing approximately 1.6% interest in the project. The amendment provides additional time for Kumul to pay the remaining purchase price of $241mn.

The PNG LNG joint venture comprises operator ExxonMobil (33.2%), Santos (42.5%), Kumul Petroleum (16.8%), JX Nippon Oil (4.7%) and the PNG landowner company MRDC (2.8%). Santos became the largest shareholder in PNG LNG with its takeover of Oil Search.