Papua New Guinea state-owned Kumul Petroleum has again delayed a deal to buy a 5% stake in the PNG LNG project from Santos Ltd., now to the end of August, to line up funding, the Australian company and PNG prime minister said on May 1.

The exclusivity period, extended already once from the original deadline of December 2022 to April 30, will now end on Aug. 31.

Santos said it would work closely with Kumul during the extension period to help it finalize financing with third parties.

"While the PNG project is a very valuable asset and Santos' balance sheet is strong, Santos remains committed to selling five per cent equity in the project to support the PNG government to achieve the nation's equity objectives," Santos CEO Kevin Gallagher said in a statement.

PNG Prime Minister James Marape said private sector lenders have been lined up to provide funding.

"Given the volatility in the financial markets and high interest rate environment, I support Kumul's request for a time extension to complete the transaction," Marape said.

In September last year, Santos received a $1.1 billion binding offer from Papua New Guinea's state-owned Kumul Petroleum for a 5% stake in the PNG LNG project, the country's biggest resources project.

Santos' acquisition of Oil Search in 2021 made it the largest shareholder in PNG LNG, considered one of the world's lowest cost LNG producers. If the sale goes through, Santos will remain the top stakeholder with a 37.5% interest.

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