PNG Moves to Saving Culture, Turning LNG Riches into National Savings

 Papua New Guinea has taken a major step toward long-term financial planning, with Prime Minister James Marape announcing that a portion of revenue from the PNG LNG project will now be saved through a sovereign wealth fund.

Under the new arrangement, seven percent of earnings from PNG LNG will be allocated to the fund starting this year, marking what the Prime Minister described as a shift toward a national saving culture.

 Prime Minister James Marape

Marape said Kumul Petroleum Holdings Limited has been given responsibility to manage the fund, following the government’s full repayment of bank loans associated with the LNG project.

He said those loans, valued at approximately K69 billion, had weighed heavily on public finances and their clearance now allows the country to focus on future investments rather than debt servicing.

The Prime Minister said remaining LNG earnings will be distributed under a dividend policy expected to be implemented next year, with the bulk of funds supporting the national budget.

He also emphasised the need for Kumul Petroleum to remain financially strong as it prepares to take equity positions in upcoming developments such as Papua LNG and P’nyang LNG.

“Seven percent of earnings from our PNG LNG will be ploughed into the sovereign wealth fund, and the remaining earnings will be distributed under a dividend policy that will be implemented next year,” Marape said. “In this context, we are looking forward not only to equity earnings but also to tax revenues, which will continue to support the national budget.”