Gulf and Central provinces have agreed to an 80:20 split of Tier One benefits from the Papua LNG Project, following more than two weeks of contentious negotiations.
The official agreement signing took place yesterday at the APEC Haus in Port Moresby city between both parties from the Gulf Provincial Government and Central Provincial Government, witnessed by the Ministers for Petroleum Jimmy Maladina, National Petroleum Authority, the State Negotiation Team and Landowners from both provinces.
The signing party from Central includes Governor Rufina Peter, Hiri-Koiari MP and Deputy Opposition Leader – Keith Iduhu, Kairuku MP and Minister for Energy Peter N. Isoaimo, and LLG Presidents of the impacted areas.
The Gulf team was led by Acting Governor Morris Taudevin, Kerema MP and Finance Minster – Thomas Opa, Kikori MP and Minister for DPLGA – Soroi Eoe and the impacted area LLG Presidents.
Under the arrangement, Gulf Province, as the host of the project’s wellheads, would receive 80 per cent of the benefits, while Central Province would receive 20 per cent in recognition of its downstream role and the processing and infrastructure facilities associated with the project.
The benefits package is estimated at K6.606 billion and includes royalties, development funding, infrastructure, business opportunities and equity participation.
The negotiations were contentious. Gulf rejected the State’s initial 70:30 director’s proposal and sought a 95 per cent share. Central, arguing that its downstream facilities made it a vital project partner, sought a 60:40 or 65:35 split. The provinces are understood to have reached the 80:20 formula after 11 days of formal talks and further discussions.
To help bridge the gap, Prime Minister James Marape and the National Government committed an additional K1.2 billion through Tax Credit Scheme projects, according to information from the negotiations. The Government also offered business development and infrastructure support, as well as additional equity-related benefits.
The equity component could give provincial governments and landowners a stake in the project’s long-term commercial returns, in addition to grants and development funding.
The Tier One negotiations followed the Papua LNG Development Forum process, which began in June and was officially launched by Marape at APEC Haus on July 9, 2026.
Consultations and discussions on the Directors’ Proposal continued through July and August, before formal negotiations between the provinces began in late September.
The reported agreement is a significant step for Papua LNG, which is targeting a Final Investment Decision (FID) by December 15, 2026. It also clears the way for remaining benefit-sharing arrangements to progress.
Papua LNG is expected to be one of Papua New Guinea’s largest resource investments, with billions of kinas in benefits projected over its operating life.
The next challenge for Gulf and Central will be turning the agreed package into infrastructure, jobs, local business opportunities and improved services for affected communities.