Santos signs non-binding LNG agreements

Santos and POSCO agree key commercial terms for long-term LNG supply

Santos has agreed key commercial terms with POSCO Steel Co., Ltd for the long-term supply of LNG.

Under the proposed agreement, Santos would supply LNG on a delivered ex-ship basis for a term of 10 years. LNG would be sourced from Santos’ diversified global LNG portfolio, with supply commencing in 2030 or 2031.

Execution of the transaction remains subject to the negotiation and execution of an LNG sale and purchase agreement (SPA), and all required corporate approvals.

Santos to secure 1 million tpy of LNG from Ksi Lisims LNG project in Canada

Santos has entered into a non-binding heads of agreement (HOA) with Western LNG and its partners for the purchase of approximately 1 million tpy of LNG from the proposed Ksi Lisims LNG project in British Columbia, Canada, on a free on board basis.

Under the proposed agreement, Santos would purchase LNG for a term of up to 20 years, with supply commencing from approximately 2031.

The HOA is non-binding and remains subject to the negotiation and execution of definitive agreements, including an LNG SPA, satisfaction of customary conditions precedent, and all required corporate approvals.

The Ksi Lisims LNG supply is complementary to Santos’ existing LNG portfolio across Papua New Guinea and Australia, and would provide Santos with the ability to:

• Grow LNG sales volumes without a corresponding increase in upstream capital investment.
• Increase long-term supply flexibility for existing and future customers across Asia.
• Diversify Santos’ LNG supply base geographically with competitive cost of supply Canadian LNG having a secure, relatively short shipping route to premium north Asian markets.
• Optimise volumes across the portfolio balancing market conditions, customer requirements, and regional pricing opportunities.

Santos Managing Director and CEO, Kevin Gallagher, said these agreements demonstrate the continued growth and diversification of Santos’ global LNG portfolio that supports the growing energy needs of our customers and partners across Asia.

“Santos has a strong track record in building long-term successful relationships with leading energy customers, which we’re combining with flexible third-party supply to create value across our global LNG portfolio.

“Our recent agreements reflect the strength of our portfolio, our reputation for reliability, our ability to meet evolving customer needs and our commitment to delivering energy security for Australia’s neighbours in Asia.

“Ksi Lisims gives us access to a high-quality, competitive cost of supply of LNG that complements our equity production. Its location on Canada’s Pacific coast, access to low-cost Western Canadian natural gas and focus on lower-emissions LNG production make it an attractive addition to our portfolio.

“Similarly, POSCO is one of the world’s premier steel manufacturers. We are proud to establish a new long-term partnership with a customer of such global standing and look forward to supporting POSCO with secure, competitive cost of supply and reliable energy supply.”

“We see significant potential to build on these relationships over time, including by supporting the energy security and decarbonisation goals of customers across the region,” Gallagher concluded.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/16092026/santos-signs-non-binding-lng-agreements/