Papua New Guinea’s Kumul Petroleum Ltd. has been gauging interest with several international banks about backing two LNG projects, but environmental opposition could be pushing the state-owned firm to rely on Chinese banks for financing.

Banks in Australia, Europe and the United States have been increasingly wary of funding the island nation’s existing and proposed liquified natural gas facilities due to environmental, social and governance (ESG) issues. 

Kumul’s Managing Director Wapu Sonk recently told news media the company is now in advanced talks with three Chinese banks, thanks in part to the Chinese financial industry’s “different view on ESG.”

Australian oil and gas explorer Santos Ltd has twice extended an offer to Kumul after it failed to secure financing...