Santos has agreed to sell a 25% interest stake in Darwin LNG and Bayu-Undan to SK E&S for US$390 million with effect from 1 October 2019 with customary adjustments on completion. Santos also receives the benefit of approximately US$120 million of cash flow relating to the interests from 1 January 2019 to 1 October 2019.
The sale is conditional on completion by Santos of the acquisition of ConocoPhillips’ northern Australia and Timor-Leste portfolio as announced on 14 October 2019, third-party consents, regulatory approvals and a final investment decision (FID) on Barossa.
SK E&S already has a 37.5% interest in the Barossa project to backfill Darwin LNG. Santos’ sale of interests in Darwin LNG and Bayu-Undan to SK E&S advances partner alignment for the development of Barossa, which remains a key priority for both companies.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the agreement with SK E&S builds partner alignment and is another significant step towards bringing Barossa gas into production through the Darwin LNG facilities.
“We are delighted to have agreed terms with SK E&S to acquire interests in Darwin LNG and Bayu-Undan and look forward to continuing and building on the long-term relationship between our two companies.”
“Santos continues to build alignment between the Darwin LNG and Barossa joint ventures through discussions with Darwin LNG participants and others to acquire equity in Barossa. We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40% to achieve increased partner alignment.”
“Santos expects to take a final investment decision for the development of Barossa following completion of the ConocoPhillips acquisition and once all necessary technical, engineering and commercial contracts are in place, including the processing agreement with Darwin LNG, to allow the project to proceed subject to market conditions,” Gallagher said.
Read the article online at: https://www.lngindustry.com/liquefaction/12032020/santos-sells-darwin-lng-and-bayu-undan-stake-to-sk-es/