TotalEnergies cuts Papua LNG cost to $14 billion

• TotalEnergies completed key Papua LNG milestones, including EPC tendering and a planned transfer of operatorship to ExxonMobil, moving the project closer to a final investment decision.
• The project’s estimated capital cost has been reduced by about US$4 billion since 2024 to around US$14 billion following design changes and contractor rebidding.
• TotalEnergies said the changes are intended to improve project economics, strengthen LNG marketing arrangements, and support progress toward a final investment decision.

TotalEnergies (NYSE:TTE) has completed major contractual steps for the Papua LNG project, including EPC tendering and a planned operatorship transfer to ExxonMobil, while reducing estimated project capital expenditure to around US$14 billion.

The project previously faced higher development costs after initial contractor proposals, leading partners to redesign parts of the development and reopen EPC bidding processes to reduce expenses.

“These agreements mark decisive step towards the Final Investment Decision of Papua LNG,” said TotalEnergies Chairman and CEO Patrick Pouyanné.

The company said cost reductions of close to US$4 billion have been achieved since 2024, while TotalEnergies will sell a 9.1% interest and retain a 20% stake after the transaction, with ExxonMobil becoming operator with a 34.1% interest.

The Papua LNG project will include gas production and liquefaction facilities in Papua New Guinea, with planned LNG production capacity of 5.6 million tonnes per year and marketing arrangements involving TotalEnergies and Papua New Guinea state-linked entities.

TotalEnergies said the project partners have also amended the 2019 gas agreement with the Papua New Guinea government and created an LNG marketing joint venture to commercialize 2.4 million tonnes per year of production.