Santos, a major energy player in Australia, has recently signed new agreements for the supply of liquefied natural gas (LNG) in the Asian market. These agreements include a long-term contract with South Korea's POSCO and an agreement to purchase 1 million tons per year from an LNG project in northwestern Canada. These agreements are designed to supply low-carbon LNG to Asian markets.
Details of the Agreement with POSCO
Santos has signed key commercial terms in this agreement with POSCO for the supply of LNG for 10 years on a "delivered ex ship" basis from its global portfolio. This contract will commence in 2030 or 2031 and is contingent upon negotiations and the signing of a sales and purchase agreement for LNG, as well as necessary corporate approvals.
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Agreement with Ksi Lisims LNG Project in Canada
Alongside the agreement with POSCO, Santos has also signed a non-binding agreement with Western LNG to purchase approximately 1 million tons of LNG per year from the Ksi Lisims LNG project located in British Columbia. This agreement will last for a maximum of 20 years starting from 2031 and remains dependent on negotiations and final agreements.
According to Santos, these agreements reflect its growing position in the global LNG portfolio and its role as a secure and reliable energy supplier for customers in the Asia-Pacific region. The Ksi Lisims LNG project is designed as a floating LNG export project with a capacity of 12 million tons per year, emphasizing low-carbon LNG production.
Strategic and Economic Benefits
Santos believes that sourcing LNG from the Ksi Lisims project will enhance its existing portfolio in Papua New Guinea and Australia, allowing it to increase LNG sales volumes without additional upstream investment. This project also provides long-term supply flexibility for existing and future customers in Asia and helps diversify LNG supply geographically.
Kevin Gallagher, CEO of Santos, stated that these agreements demonstrate the strength of their portfolio and their reputation for reliability. He also emphasized the importance of collaborating with major energy customers and providing secure energy for Australian neighbors in Asia.
The Ksi Lisims LNG project, developed by the Nisga'a Nation, Rockies LNG, and Western LNG, is designed primarily to supply LNG to Pacific Basin and Asian markets and supports a low-carbon LNG production profile using hydroelectric energy for liquefaction.
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