KPHL explains funding for State’s US$1.1 billion Papua LNG stake

Kumul Petroleum Holdings Limited [KPHL] says the State’s US$1.1 billion investment in the Papua LNG Project will be funded through domestic borrowing and revenue from its existing PNG LNG investment, without direct funding from the National Budget.

KPHL Chairman Ambassador Isaac Lupari said the funding covers the State’s 22.5 per cent equity stake in Papua LNG, not the total cost of developing the project.

He said US$300 million would come from a syndicated loan arranged by Bank South Pacific, while the remaining US$800 million would be generated from KPHL’s 15.1 per cent share in the PNG LNG Project between 2026 and 2032.

Mr Lupari clarified that the US$800 million was not currently available in cash but would be generated progressively over the construction period to meet the State’s share of project costs.

KPHL has already secured US$180 million for the first payment following a Final Investment Decision (FID). This forms part of the overall US$1.1 billion funding package.

Mr Lupari said the financing approach would avoid a direct National Budget allocation for the State’s equity contribution, allowing government funds to remain available for priorities such as health, education and infrastructure.

However, he said KPHL’s ability to provide dividends and other financial support to the Government would be limited during the financing period as the company prioritises project funding and debt repayments.

Economic benefits

Mr Lupari said Papua LNG was expected to generate economic benefits during construction and production.

Construction spending on wages, local suppliers and contractors is expected to create business opportunities and support household incomes.

Once production begins, the project is expected to generate foreign exchange through LNG exports, along with taxes, royalties and other benefits for the country.

The State’s equity participation through KPHL is also expected to provide long-term investment returns.

However, he said the timing and value of these benefits would depend on the project reaching FID, successful construction, production performance, LNG prices, operating costs and debt repayments.

Mr Lupari also urged national leaders to ensure public statements about major resource projects were based on accurate information, warning that misleading comments could undermine investor confidence and efforts to secure future financing.

KPHL issued the statement on November 1, 2026.