Papua New Guinea has long looked to its natural gas resources as a way to boost the economy, create jobs, and bring in revenue for the country. At the heart of this effort is the Papua LNG project, one of the largest proposed energy developments in PNG’s history. But as of March 2026, the project has faced years of delay, rising costs, and political debate, raising questions about whether it will deliver the benefits many people hoped for.
Papua LNG is a planned liquefied natural gas project led by TotalEnergies, in partnership with major international oil and gas companies including ExxonMobil, Santos, and ENEOS Xplora. Indigenous PNG partners including Kumul Petroleum Holdings and Mineral Resources Development Company also have stakes in the project.
If completed, Papua LNG would process natural gas from PNG’s rich offshore fields and turn it into LNG, a form of gas that can be shipped to export markets, especially in Asia. The project is expected to use existing facilities alongside new infrastructure such as pipelines, processing plants, and export terminals. TotalEnergies says the development could create more than 3,000 jobs for Papua New Guineans over the life of the project, and support community programs and infrastructure in project areas.
Despite its promise, Papua LNG has encountered a long road to realisation.
The project has been discussed and negotiated for years now, and its Final Investment Decision (FID), the moment when developers commit to full construction, has repeatedly been delayed. Costs have also risen. In 2019, the original cost estimate was around US$11 billion (about K47 billion). But by 2026, those figures had climbed significantly, with some estimates putting total costs at around US$18 billion (about K75 billion).
This rising cost has sparked debate in PNG Parliament and among business and political leaders. Peter O’Neill, former prime minister and current Member of Parliament, has been one of the most vocal critics of the way negotiations have unfolded. In a March 2026 debate, O’Neill said that the delay and renegotiation process has made the project more expensive and has cost the nation dearly. He warned that government proposals to offer additional concessions worth billions of kina could disadvantage PNG in the long run.
“The time for going cap‑in‑hand to multinational corporations is over,” O’Neill said in Parliament. “Reports of the Government offering billions in additional concessions to keep the Papua LNG project on life support are deeply concerning. We cannot afford to negotiate to their advantage at a cost of US$3 billion to our own people.”
O’Neill’s argument is that PNG should stand firm in its negotiations, protect national interests, and avoid giving away too much to foreign investors simply to get the project moving. Similar concerns were echoed in public commentary, where critics described negotiations that risked sacrificing long‑term benefits for short‑term progress.
On the other side, government leaders, including Prime Minister James Marape and Petroleum Minister Jimmy Maladina, maintain that the project remains important and that progress is being made toward cost‑effective solutions. They say PNG must balance national benefits with business realities, ensuring investors remain confident while the country secures fair long‑term value.
In statements earlier this year, the government has reiterated that negotiations continue and that the project has not been cancelled, despite delays and rising estimates.
Analysts tracking Papua LNG say the complexity of gas projects, especially in remote regions with high infrastructure costs, means that careful negotiation is essential. Gas markets have fluctuated in recent years, and the global demand outlook for LNG is influenced by energy transition policies, climate targets, and competition from new suppliers.
One corporate voice that speaks to the ongoing commitment comes from the operator and lead partner of the project. Arnaud Berthet, Country Manager for TotalEnergies PNG, told local media that the rebid and procurement phase was concluding and that costs were being managed more reasonably. He said financing documentation was progressing for lenders, and interest from LNG buyers in Asian markets remained strong, all good signs for the project moving toward its final investment decision.
Papua LNG is part of a broader energy future for PNG. The country already has one major LNG project, PNG LNG, which began production in 2014 and has exported natural gas to global markets. The early repayment of PNG LNG’s project debt in late 2025 was seen as a positive development by industry executives, and companies like Santos highlighted how this establishes a stronger financial foundation for future investments like Papua LNG.
Kevin Gallagher, Managing Director and Chief Executive Officer of Santos, said that strengthening the balance sheet after early loan repayment positions partners better as they pursue Papua LNG. His comments reflect the view that long-term energy investments must be financially stable to benefit both investors and the nation.
For ordinary Papua New Guineans, the question around Papua LNG goes beyond numbers on a spreadsheet. Supporters argue the project could deliver jobs, infrastructure development, and revenue that can fund schools, hospitals, and public services. Opponents, including O’Neill and some community commentators, see risk in sacrificing too much of the country’s long‑term wealth in negotiations.
One concern that surfaced during parliamentary debate in March was not just cost but energy security, including discussions about possible fuel storage sales and how that links to Papua LNG and broader national resilience. Members of Parliament questioned whether current plans might weaken PNG’s long‑term ability to manage energy needs domestically.
