Santos has agreed to buy an additional 3.3% participating interest in Petroleum Retention Licence 15 and Papua LNG from TotalEnergies for approximately $189 million. The transaction would raise Santos’ holding to 21% after Papua New Guinea exercises its back-in rights and increase its share of LNG production by about 19%, to approximately 1.2 million tonnes per year. Completion remains subject to regulatory approvals and Papua LNG reaching a final investment decision, which Santos expects in the fourth quarter of 2026. The transaction will be economically effective from January 1, 2026. The purchase is part of a broader ownership and operating restructuring under which TotalEnergies will transfer operatorship to ExxonMobil PNG Antelope Limited and sell a 9.1% post-state-back-in interest to existing partners. After the changes and state back-in, TotalEnergies expects to retain 20%, while ExxonMobil will hold 34.1% and become operator. Santos will own 21%, ENEOS Xplora 2.4%, and Papua New Guinea entities Kumul Petroleum and MRDC will hold a combined 22.5%. ExxonMobil’s existing operation of the neighboring PNG LNG development could support construction and operating synergies between Papua New Guinea’s two major LNG projects. Papua LNG is designed to develop the Elk-Antelope gas fields and produce around 5.6 million tonnes of LNG annually, primarily for Asian markets. TotalEnergies said project optimization and a renewed EPC tendering process have generated close to $4 billion in savings since 2024, reducing estimated capital expenditure to around $14 billion. The project had previously been delayed after TotalEnergies said in 2024 that initial contractor bids were not commercially viable. Partners subsequently redesigned parts of the development and reopened competition to a broader group of Asian engineering and construction companies. Papua New Guinea’s government and the project partners have also amended the gas agreement as they work toward sanctioning the development. For Santos, the acquisition expands its exposure to another major LNG project while its Barossa gas development and Pikka oil project move toward production, and strengthens its position in Papua New Guinea alongside its existing interest in ExxonMobil-operated PNG LNG. If Papua LNG reaches FID as planned, it would give Santos a larger long-term LNG supply source near major Asian importing markets and allow greater use of ExxonMobil’s existing LNG infrastructure in Papua New Guinea.