Regulatory and Benefit Sharing Framework

Large-scale liquefied natural gas developments require a robust regulatory and governance framework to ensure that projects are delivered responsibly and that their benefits are shared fairly and correctly. In Papua New Guinea, this framework is defined by national legislation and long-established practices.

Papua LNG is being developed in line with this framework, ensuring compliance with the country’s legal requirements while aligning with international standards for environmental and social performance.

Regulatory Framework

The project is governed by the laws and regulations of Papua New Guinea, which define the conditions for resource development, environmental management and stakeholder engagement.

The Government of Papua New Guinea plays a central role in overseeing the project, including the review of technical, environmental and social studies, and the issuance of key permits and approvals. This regulatory oversight ensures that the project is developed in a safe, transparent and accountable manner.

Licensing Process

The development of Papua LNG follows a structured licensing process led by the Government. This includes the submission and review of detailed project documentation, culminating in the granting of development licenses and permits.

Benefit Sharing

Benefit sharing is a fundamental principle of LNG development in Papua New Guinea, ensuring that project value is distributed among national, provincial and local stakeholders. Direct benefits include financial flows such as royalties, equity participation and development levies. These are complemented by indirect benefits, including employment, training, business development and investment in infrastructure such as roads, schools and healthcare facilities, contributing to long-term socio-economic development.

A key step in this process is the Development Forum, required under the Oil and Gas Act. This forum brings together the State, affected Project area landowners and local governments to agree on benefit sharing arrangements prior to the award of licenses. The outcomes of the negotiations and agreement will be documented in a Benefit Sharing Agreement (BSA). The Oil and Gas Act outlines the procedures for identifying beneficiaries and the types of benefits they are entitled to.

SMLI & Development Forum

The Project entities themselves are not signatories to the Benefit Sharing Agreement. However, in line with the Oil and Gas Act, the Project supports the State in identifying eligible beneficiaries through a structured and legally defined process.

This process follows three key steps:

Once these three steps are completed, the State convenes the Development Forum. For Papua LNG, this process will define project-specific agreements, in line with national frameworks and established practices. The outcomes of these negotiations are then incorporated into the Benefit Sharing Agreement.