Twelve additional banks have declared their decision to refrain from financing a proposed $15 billion liquefied natural gas (LNG) project in Papua New Guinea, in which Australia’s Santos holds a significant stake. This announcement expands the growing list of institutions committed to not support the TotalEnergies-led initiative, which is poised to be the second largest gas project in PNG’s history.
Previously, fifteen banks and credit agencies, including major Australian players like Commonwealth Bank, ANZ, NAB, and Westpac, had already pledged their non-involvement. Joining them are notable names such as ING, Rabobank, and Standard Bank, amidst a joint declaration from five environmental organizations on Tuesday.
Will van de Pol, the chief executive of Market Forces, emphasized the increasing recognition among leading global banks of the rising risks associated with the Papua LNG project, stating, “Many of the world’s major banks, including all of Australia’s big four, are recognising the growing risks and have ruled out funding the Papua LNG project, leaving MUFG (Japan’s Mitsubishi UFJ Financial Group) and other Japanese banks isolated.”
The project, proposed by TotalEnergies, includes the construction of a four-train LNG plant adjacent to ExxonMobil’s existing facility in Caution Bay, with the capacity to liquefy four million tonnes of gas annually. A final investment decision on the venture, which has experienced considerable delays, is now set for late 2026.
Santos holds a 22.8 percent interest in the joint venture, while ExxonMobil controls a 37.1 percent stake, and TotalEnergies owns the remaining 40.1 percent. The French energy giant contends that the project is ideally positioned to serve the Asian market, which heavily relies on coal for approximately 85 percent of its electricity needs.
Despite claims from PNG officials labeling the project as one of “national significance” crucial for the country’s economy, activists warn that it poses severe risks to local communities and the environment. They assert that this development could adversely impact the global climate and breach numerous voluntary standards used by banks to evaluate social and environmental risks tied to infrastructure projects.
Peter Bosip, the executive director of PNG’s Centre for Environmental Law and Community Rights, expressed concerns about the implications of financing such a project, likening it to “borrowing against the future” and cautioning that local ecosystems and communities would bear the long-term consequences once the gas is depleted.
TotalEnergies and Santos have been reached out to for further comment on the evolving situation.
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