(Adds statement on Papua LNG, P'nyang project talks, expected...

(Adds statement on Papua LNG, P'nyang project talks, expected capital expenditure)

Feb 25 (Reuters) - Oil Search Ltd (OSH) on Tuesday flagged higher spending in 2020 and said that partners in a planned $13 billion expansion of Papua New Guinea's LNG exports were still ready to renew discussions with the government over key terms.

A collapse in talks with the PNG government in January over sharing spoils from the Exxon-led P'nyang project prompted expectations of a jump in the company's spending, as planned benefits from shared infrastructure with the Total-led Papua LNG project is threatened.

However, the company signalled willingness among project stakeholders to restart talks.

"Since then, both ExxonMobil and Total have indicated their support for renewed discussions with the Government, as all project proponents, including Oil Search, believe that the existing proposed three-train development is the most efficient way to develop Papua LNG and P'nyang," the company said.

P'nyang and Total's TOTF.PA Papua LNG project were designed to feed three new processing units, called trains, at Exxon's PNG LNG plant, with the two projects sharing infrastructure with the aim of saving $2 billion to $3 billion dollars on construction costs.

Meanwhile, the company said if early engineering activities at the planned three-train development occur in 2020, capital expenditure is expected to be in the range of $710 million to $845 million, although highly dependent on when, and if, a gas agreement with the PNG government could be signed.

Oil Search added that joint venture partners at the P'nyang and Papua projects will meet in coming weeks to work on a formal go-forward plan for the expansion.

Meanwhile, hit by weak LNG and oil prices, the company's net profit for the year ended Dec. 31 fell to $312.4 million, from $341.2 million a year earlier. An IBES consensus estimate from Refinitiv had expected a profit of $339 million.

Oil Search declared a final dividend of 4.5 cents per share, down from 8.5 cents it paid in 2018, while full-year revenue rose 3% to $1.58 billion.