Kumul Petroleum Holdings Limited (KPHL) has clarified its US$1.1 billion funding plan for the State’s 22.5% equity participation in the Papua LNG Project. Approved by the National Executive Council (NEC), the strategy combines domestic borrowing with cash flow from KPHL’s existing PNG LNG Project investment. The plan requires no direct allocation from the National Budget.

KPHL Chairman, Ambassador Isaac Lupari, emphasized that public discussions must separate KPHL’s equity funding obligations from the broader, total financing required for the entire Papua LNG Project.

"KPHL is financing the State’s participation through its own commercial resources and domestic lenders. The US$1.1 billion package supports our equity commitment; it is not the total financing requirement for the Papua LNG Project," Chairman Lupari stated.

Chairman Lupari broke down the US$1.1 billion equity funding package into two distinct components:

• US$300 million: Provided by domestic lenders through a syndicated loan arranged by Bank South Pacific (BSP).

• US$800 million: Generated by KPHL’s 15.1% interest in the existing PNG LNG Project over the 2026–2032 construction window.

"We will use these funds progressively to meet our share of project costs as cash calls fall due," Lupari explained. "The US$800 million will be generated over that construction period. We are not saying the full amount is held in cash today. This is a highly efficient, lower-cost approach. We have already secured US$180 million ready for our first cash call following the Final Investment Decision (FID)."

By utilizing KPHL’s internal cash flows and local borrowing, the plan completely avoids direct National Budget drawdowns. This protects the State's budget capacity for critical public sectors like health, education, and infrastructure.

Furthermore, the framework prevents triggering the World Bank’s negative pledge requirements and limits financial recourse to the State. Lender recourse and asset security will be strictly governed by agreed financing documents.

KPHL will maintain its long-term dividend commitments to the Government. However, the company noted that financial support to the state budget will be minimal during the heavy construction phase, as KPHL prioritizes project funding and debt service.

Chairman Lupari projected that the economic benefits of the Papua LNG Project will roll out in clear stages:

• During Construction: Local spending will directly support wages for Papua New Guinean workers and drive revenues for domestic contractors and suppliers.

• During Production: LNG export sales will inject vital foreign exchange earnings into the economy. The State will receive direct inflows via taxes, royalties, and long-term investment returns from KPHL’s 22.5% stake.

"These benefits will build over time," Lupari noted. "Their value and timing depend on reaching FID, successful construction, operational performance, global LNG prices, and debt repayments."

"For the first time in our nation's history, the Government, through KPHL, is financing the State’s participation in a world-scale resource project through purely domestic channels," Chairman Lupari said. He commended Prime Minister Hon. James Marape and the Government for their leadership in securing this milestone. "Our responsibility is to turn petroleum ownership into sustainable value for Papua New Guineans through clear financing, careful cash management, and strong governance."

KPHL welcomes factual public discourse but urged leaders to exercise responsibility. Inaccurate commentary risks undermining international partner confidence and future national financing efforts.