Kumul Petroleum Holdings Limited (Kumul) made a binding conditional offer to Santos to acquire a 5% stake in PNG LNG for an asset value of US$1.4 billion, including a proportionate share of project financing debt of US$0.3 billion.
Kumul has advised Santos that the Offer will now stay available until 31 August 2023, as previously stated. Santos has committed to negotiating exclusively with Kumul regarding the sale of shares in PNG LNG during this time period.
Kumul has committed to cooperating closely with Santos during this additional time to help it finalise its acquisition of financing from third parties. The deal is also strongly supported by both the government and the joint venture partners.
Santos Managing Director and CEO Kevin Gallagher stated that PNG LNG continues to provide compelling value to shareholders.
Gallagher said despite significant changes in the global energy landscape over the last year, PNG LNG remains a world-class asset that is low-cost, low-emissions, and provides reliable LNG supply to Santos’ Asian customers.
“The project is positioned in a supportive regulatory environment, with fiscal stability arrangements in place ensuring that it contributes strong cash flows to project participants and delivers significant economic and social benefits to the nation. 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,” Gallagher added.
Prime Minister James Marape said, “I am fully supportive of continuing the transaction to purchase five per cent of PNG LNG in pursuing PNG national interest and its nation building programmes. Given the volatility in the financial markets and high interest rate environment, I support Kumul’s request for a time extension to complete the transaction. With credible private sector lenders significantly advanced, I am confident that Kumul will secure an appropriate financing package.”
