MINISTER Minister for Petroleum, Hon. Jimmy Maladina, MP, has welcomed the signing of the Revised Papua LNG Project Agreement (“Agreement”), describing it as an important step towards securing a Final Investment Decision (“FID”) for the Papua LNG Project while protecting Papua New Guinea’s long-term fiscal and national interests.
The revised Agreement follows detailed negotiations between the State and the project participants and establishes a targeted fiscal support mechanism aimed at strengthening the commercial viability and financing of Papua LNG.
Minister Maladina said the Government had rejected a broad or permanent reduction in the State’s fiscal take and instead negotiated a temporary, reciprocal and appropriately capped arrangement linked to prevailing market conditions.
“This is a balanced transaction, not a giveaway. The arrangement recognises the commercial realities facing a project of this scale while ensuring Papua New Guinea retains appropriate protection and participates in the upside when market conditions are stronger,” Minister Maladina said.
The fiscal mechanism provides limited support under weaker market conditions while allowing the State to receive additional benefits when market conditions improve. Appropriate limits and safeguards have been incorporated to protect the State’s long-term fiscal position.
Royalty and development levy payments to landowners, provincial governments and local-level governments remain protected.
The broader negotiated package also delivers additional benefits to Papua New Guinea. These include an option for a State nominee to acquire an additional 2.5% interest in Papua LNG. This interest is additional to the State’s existing entitlement under section 165 of the Oil and Gas Act.
The associated PNG LNG arrangements also provide for an improved wellheadvalue basis for calculating royalty and development levy payments, cheaper gas for domestic electricity generation, and free gas to generate up to one megawatt of discounted electricity for landowner communities in and around Caution Bay.
Minister Maladina said the Government had approached the negotiations with a clear objective of getting Papua LNG into development while maintaining appropriate safeguards for the State.
“Papua LNG represents a major investment in Papua New Guinea. It has the potential to generate employment, business opportunities, infrastructure investment and substantial future government revenue. Our responsibility was to find a commercial pathway towards FID without surrendering the State’s long-term interests,” he said.
The Minister stressed that the revised arrangements are conditional upon the project achieving an affirmative FID on or before 15 December 2026.
“The final deadline for FID is a drop-dead deadline. The State has provided this negotiated pathway for one clear purpose, to secure a firm investment commitment and move Papua LNG into development. The Government expects all parties to work towards meeting this deadline,” Minister Maladina said.
The Minister concluded that the signing today provides greater certainty for the State, the project participants,
our landowners and other stakeholders. The focus must now shift towards achieving FID and progressing Papua LNG into construction and development.