ExxonMobil Takes Operatorship of Papua LNG Venture Amid Cost Cuts

ExxonMobil is poised to take operatorship of the Papua LNG venture after stakeholders pushed the $14 billion undertaking toward a final investment decision. The consortium has concluded the EPC tender phase, with proposed contract awards now subject to co-owner endorsement.

TotalEnergies indicated that refinements to the project's design and re-tendering of EPC packages have yielded roughly $4 billion in savings since 2024, trimming projected capital outlays to about $14 billion. As part of the restructuring, TotalEnergies will cede operational control to ExxonMobil to exploit construction and operational efficiencies tied to the adjacent PNG LNG facility.

TotalEnergies will offload a 9.1% stake in Papua LNG to its partners, lowering its post-back-in holding to 20% while preserving its LNG offtake entitlement. After these moves and the Papua New Guinea government's invocation of its back-in rights, ExxonMobil will command a 34.1% interest and act as operator.

The consortium has also concluded an updated gas agreement with the Papua New Guinea government, aligning with the revised economic parameters. TotalEnergies and state-linked entities in Papua New Guinea will form an LNG marketing joint venture to sell 2.4 million metric tons per annum from the project, aiding in securing project financing.