Wednesday, 27 September 2023
Ahead of TotalEnergies’ Investor Day in France, Australian banks ANZ and NAB and Japanese banks MUFG, SMBC, and Mizuho received letters from Market Forces, Jubilee Australia and Papua New Guinean civil society organisation CELCOR (Center for Environmental Law and Community Rights Inc.) calling on the banks to not finance the Papua Liquefied Natural Gas Project (Papua LNG).
TotalEnergies is the primary developer of Papua LNG, owning a 37.55% stake in the project, alongside ExxonMobil (37.04%), Santos (22.83%) and JX Nippon (2.58%).
Civil society organisations in Papua New Guinea are raising serious concerns about the US $10 billion project with its potential financiers, having already warned the US Export-Import Bank (US EXIM) to stay out after the credit agency signalled its intent to provide finance for the project.
According to IJGlobal, French bank Crédit Agricole is acting as financial adviser to the project, and is pre-sounding lenders on a potential US $3-5 billion project finance loan.
In August, civil society organisations from Australia, Papua New Guinea, Europe and the United States wrote to Crédit Agricole urging the bank to withdraw from the project immediately.
ANZ is the only one of the big four Australian banks to have no project finance restrictions in place for new oil and gas extraction projects.
NAB received a letter due to having two policy positions on gas that contradict each other. NAB has stated it “will not directly finance greenfield gas extraction projects outside Australia”, but also that it will “continue to support integrated liquified natural gas (LNG) in Australia, New Zealand, and Papua New Guinea and selected LNG infrastructure in other regions.” Papua LNG is an integrated LNG project that involves the development of a greenfield gas field. If NAB were to directly finance the integrated Papua LNG project, it would be financing a greenfield gas extraction project, potentially breaching its own policy.
None of the Japanese megabanks, MUFG, SMBC and Mizuho, have any project finance restrictions on new oil and gas extraction projects, and have repeatedly been amongst the biggest financiers of LNG and fossil fuel expansion in the world.
Given their geographical proximity to the project, existing relationships with its developers, policy loopholes, and propensity to finance new and expanded fossil fuel projects and overlook the human rights issues associated with them, these banks have all been put on notice that this project is rife with environmental, social, financial and legal risks that they should avoid by ruling out any finance for Papua LNG.