Santos and Kumul Petroleum have amended a sale agreement that would see Kumul buy into the PNG LNG (liquefied natural gas) project.
Kumul is PNG’s national oil and gas company, and is already an existing partner in the PNG LNG project.
PNG LNG is an integrated development project aimed at commercialising PNG’s gas resources.
Santos has now granted more time to Kumul to complete the transaction for 2.6 per cent of the project, with $352 million of the $576 million paid to Santos.
A timeline of the long-awaited transaction is as follows:
September 2022
Kumul originally offered to acquire five per cent of the PNG LNG project in September 2022, a deal at the time touted at $US1.4 billion.
December 2022
The offer was to remain open until December 31 2022, but was extended to April 30 2023 to give Kumul more time to secure a funding package.
May 2023
As the April 30 deadline approached, the offer was extended yet again to August 31 2023.
Santos managing director and chief executive officer Kevin Gallagher said at the time he was confident in the project and the deal with Kumul.
“While the PNG project is a very valuable asset and Santos’ balance sheet is strong, Santos remains committed to selling five per cent equity in the project to support the PNG government to achieve the nation’s equity objectives,” he said.
August 2023
The original offer from Kumul expired but the companies restructured the deal for 2.6 per cent of PNG LNG for $576 million.
If the new agreement was executed before June 30 2024, Kumul would be able to acquire the remaining 2.4 per cent of PNG LNG for $524 million, bringing the total to five per cent.
December 29
Kumul secured the 2.6 per cent of PNG LNG from Santos with $US250 million in escrow, allowing the company to execute a binding agreement for the remaining 2.4 per cent.
January 31
Kumul paid $US352 million to Santos, equivalent to approximately 1.6 per cent, to allow partial completion of the transaction while it shores up funding for the remaining interest.
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