By Lewis Jackson
SYDNEY (Reuters) – Major global lenders should refuse to finance a liquefied natural gas (LNG) project in Papua New Guinea to help keep global warming in check, civil society groups said on Wednesday, as some owners tap banks ahead of a final greenlight next year.
The Papua LNG project is incompatible with keeping global warming below 1.5 C because of the emissions produced when the gas is burnt by customers, according to an open letter from a coalition of 50 environment and social justice groups.
The letter was sent to tens of major banks and public lenders in the U.S., Europe, Asia and Australia who had financed an earlier LNG project in the country or TotalEnergies projects in the Asia Pacific region since 2018.
The 5.4 million tonnes per year Papua LNG is the second major gas project in the impoverished Pacific country and is a joint venture between TotalEnergies, Exxon Mobil, Santos and state-owned Kumul Petroleum.
Even as activists warn off banks in France, the U.S. and Australia, their respective governments are wooing Papua New Guinea with defence and economic deals designed to counter growing Chinese influence in the region.
Kumul Petroleum revealed on Monday it is in advanced talks with three Chinese banks named in the letter to help finance its share in time for the project’s final investment decision in 2024.
Kumul Managing Director Wapu Sonk told Reuters Chinese banks were more willing to fund hydrocarbon projects.
France’s TotalEnergies is also currently lining up funding for the project advised by Credit Agricole, the letter said. Credit Agricole did not immediately respond to an out of hours request for comment.
The project is supported by the Papua New Guinean government, which received a quarter of tax revenue from mining and petroleum royalties in 2022.
Prime Minister James Marape said on Monday nations with the biggest carbon footprints and affluent lifestyles needed to take the lead in curbing emissions.
Total says the Papua LNG project will launch with a carbon capture and storage system that will bury roughly 1 million tonnes per year of carbon dioxide.
(Reporting by Lewis Jackson; Editing by Christopher Cushing and Sonali Paul)
