The two companies yesterday entered into a shareholder agreement in Japan yesterday to evaluate the potential of developing a methanol production facility.
Kumul Petroleum managing director Wapu Sonk, while signing the shareholder agreement, said the companies have agreed that they will establish a special purpose company to be called PNG Methanol Industry Limited.
This company will be established with the sole purpose of undertaking a study on the feasibility of the project and the conduct of the initial business activities.
"Sojitz, and Kumul Petroleum have entered into this shareholders agreement to govern the conduct of the Initial Business Activities by or on behalf of their parent companies.
"Within this agreement we have agreed to now finalise the feasibility studies, start negotiation for gas availability and pricing, financing, and start the engineering work for the plant," Mr Sonk said in a statement. He said that the shareholder signing in Tokyo was a follow on from and understanding entered in April by the two companies and the next big step will be the final investment decision.
The methanol project is the first of its kind and would generate an added value of US$183 million (K492m) by 2030, Mr Sonk said.