Papua New Guinea’s state-owned oil and gas company Kumul Petroleum Holdings Limited (KPHL) has signed a binding Heads of Agreement (HoA) with French giant Total for the joint marketing and sale of their shares of LNG and condensates to be produced from the Papua LNG Project.

Under the HoA, KPHL and Total will negotiate a Shareholders’ Agreement for an Incorporated Joint Venture (IJV) to be set up as the corporate vehicle to commercialize their combined production share of LNG and condensates from Papua LNG and jointly staffed by Total and KPHL.

Kumul Petroleum’s chairmabn, Sir Moi Avei, said the IJV will engage potential Buyers of LNG in the Asia Pacific region for the long term sale and purchase of their respective entitlements of LNG in Papua LNG.

“The agreement will allow us to demonstrate the unique value created when a National Oil Company works together with an International Oil Company. We are very confident of a successful outcome from this IJV,” Sir Moi said.

Wapu Sonk, Kumul Petrolem’s managing director, said the agreement to jointly market KPHL’s share of the production from the Elk/Antelope field with Total, the operator of the field, will allow the company to develop its staff while maximizsng the value brought to both companies by combining the attributes of KPHL with Total.

“We look forward to finalising the shareholders agreement and the incorporation of the IJV in the very near future.”

Laurent Vivier, president Gas at Total, said the landmark agreement with KPHL was an important milestone for the two companies.

“It will allow Total and KPHL to leverage their respective strengths for the successful marketing and sale of the LNG from Papua LNG.”