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# Papua New Guinea’s Kumul Petroleum in Advanced Talks with Chinese Banks to Fund LNG Projects

## Background on Funding Talks and Stake Acquisitions

By Lewis Jackson

SYDNEY, Dec 11 (Reuters) – Papua New Guinea’s state-owned petroleum company, Kumul Petroleum, is actively engaging in discussions with Chinese banks to secure funding for its stakes in two major liquefied natural gas (LNG) projects in the country. This comes as the company seeks to raise roughly $1.34 billion to acquire the remaining 5% stake in the PNG LNG project from Santos and to support its 22.5% share of the Papua LNG project, pending approval next year.

Kumul Petroleum’s managing director, Wapu Sonk, revealed that while talks with banks in the U.S., Europe, and Australia are ongoing, discussions with Chinese banks have progressed further due to their differing stance on environmental, social, and governance (ESG) issues, particularly in relation to fossil fuel development. The Bank of China, ICBC, and Bank of Communications are among the Chinese banks involved in the discussions.

The potential investment from Chinese banks underscores the evolving dynamics of global financing for energy projects, particularly in regions like Papua New Guinea, which is seeking to attract foreign investment and trade amid geopolitical tensions between the United States and China.

## Context on LNG Projects and Foreign Investment

The resource-rich but financially challenged South Pacific nation is eyeing an increase in foreign investment and trade as it navigates the competing interests of major global powers. Prime Minister James Marape, speaking at a resources and energy conference in Sydney, noted that the country recently signed a security agreement with Australia, despite stating that there were no recent security discussions with China.

Australian banks have shown reluctance to finance Kumul Petroleum’s stake in the PNG LNG project, but Sonk remains optimistic that the inclusion of carbon capture technology in the Papua LNG project could make it a more appealing investment prospect. In fact, the company is actively engaging in discussions with ANZ Group and Export Finance Australia to garner support for the upcoming project.

## Details on Payment Deadlines and Future Investment Decisions

Sonk expressed confidence in Kumul Petroleum’s ability to meet the impending deadline for the acquisition of the PNG LNG stake from Santos and affirmed the company’s readiness to secure funding for its participation in the Papua LNG project upon final investment approval in 2024. Meanwhile, Petroleum Minister Kerenga Kua emphasized the need for flexibility should the country encounter challenges in meeting the upcoming deadline.

In the face of these complex funding and investment dynamics, AI legalese decoder can prove to be an indispensable tool for Kumul Petroleum and other stakeholders involved in navigating the legal intricacies of securing financing for LNG projects. This cutting-edge AI technology can assist in deciphering complex legal jargon and formalities associated with financing agreements and investment decisions, ensuring that all parties involved have a comprehensive understanding of the legal implications and obligations associated with these high-stakes energy projects.

(Reporting by Lewis Jackson in Sydney; Editing by Jamie Freed and Sonali Paul)

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