(Bloomberg) -- Papua New Guinea Prime Minister Peter O’Neill has resigned, his Australian counterpart confirmed. The Australian Broadcasting Corp. reported he will hand over leadership to Julius Chan, citing comments at a media conference in Port Moresby.

“Peter has been a passionate servant of his country,” Australian Prime Minister Scott Morrison told reporters on Sunday in Canberra. Morrison was looking forward to working with O’Neill’s replacement, he said, without confirming Chan’s appointment.

O’Neill’s resignation comes as he faced a potential no confidence vote after dissatisfaction over a recently signed natural-gas agreement with France’s Total SA sparked a wave of ministerial resignations. His government on May 7 adjourned parliament until May 28, averting the immediate threat of a no-confidence vote.

Recent movements in the parliament have shown a “need for change,” the ABC report cited O’Neill as saying.

The government had been under pressure to get a better deal from the expansion of liquefied natural gas projects, including those led by energy giants Exxon Mobil Corp. and Total worth as much as $13 billion. That followed criticism from the World Bank and International Monetary Fund that the country’s original LNG project delivered its people only limited benefits.

O’Neill’s resignation is likely to raise questions about plans to expand the LNG industry.

The country’s political turmoil poses a risk to the goal of doubling LNG exports by 2025, Fitch Ratings said in a report earlier this month. Citing the need for more clarity, Fitch maintained its forecast “for PNG’s robust planned and proposed LNG project pipeline to be realized in full.”

(Adds background on threat of no-confidence vote, LNG deals.)

To contact the reporters on this story: Michael Sin in Hong Kong at msin12@bloomberg.net;Mariko Ishikawa in Sydney at mishikawa9@bloomberg.net;Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Niluksi Koswanage at nkoswanage@bloomberg.net, John McCluskey, Henry Hoenig

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