Prime Minister (PM) James Marape has rejected internal Treasury projections circulating in the public space that claim the revised fiscal arrangements for the Papua LNG project will cause a K28 billion revenue deficit by 2035. 

Speaking ahead of the project’s Final Investment Decision (FID) deadline on December 15, 2026, Prime Minister Marape stated that the government has not compromised its long-term financial position and that the local economy will instead expand through a combined K70 billion capital investment program.

He emphasized that this includes the project’s US$14.5 billion capital expenditure, valued at about K60 billion under baseline financial modelling. 

PM Marape further clarified that Papua LNG represents the initial step in a broader economic roadmap designed to expand total sector activity through sequential resource developments.

Marape confirmed he has directed the Department of Treasury to reconcile its data with the State Negotiating Team (SNT) during a scheduled meeting on Monday this week.

He noted that while the petroleum tax from the existing PNG LNG project may experience a temporary decline due to accelerated depreciation schedules, the revenue will be fully recovered once Papua LNG enters production.  

He also emphasized that the multi-billion-kina construction phase starting in 2027 will immediately broaden the national tax base via goods and services tax (GST), corporate income tax (CIT), and personal income tax (PIT).

"I want to say from the outset – and someone can hold me to my words – that in 2029, there will not be a drop in PNG government revenue," Prime Minister Marape promised. 

"We don't see it just from the lenses of five-year revenue loss. We look at it from the context of intergenerational benefit and value chain to the economy."

According to State Negotiating Team (SNT) briefings, the Treasury analysis inaccurately categorizes temporary timing deferrals and State equity financing as permanent financial losses.