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Santos said on Thursday the long-term SPA will supply between 0.35 and 0.4 million tonnes per annum of LNG at plateau.
The contract term is 12 years, commencing in 2032 on delivered ex-ship (DES) terms.
Santos managing director and CEO Kevin Gallagher said the contract is consistent with Santos’ strategy of maintaining “robust” LNG pricing and demonstrates the value of Santos’ LNG portfolio.
“This SPA builds upon Santos’ equity LNG portfolio and establishes a long-term relationship with Shizuoka, a Japanese gas utility providing natural gas within the Shizuoka region of Japan,” he said.
“Additionally, we look forward to future discussions on Santos’ carbon capture and storage, and synthetic gas opportunities,” Gallagher said.
This deal follows a mid-term agreement Santos signed with a unit of French energy giant TotalEnergies.
The contract with TotalEnergies Gas & Power Asia Private is for up to 0.5 million tonnes of LNG per annum over a period of 3 years plus one quarter.
This oil-indexed contract followed long-term LNG sales and purchase agreement with Hokkaido Gas in Japan, and the mid-term contract with Glencore.
LNG projects
Santos recently said the Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is almost 84 percent complete and remains on target for first production in the third quarter of 2025.
Back in 2021, Santos took a final investment decision for its $3.6 billion Barossa project.
In addition, Santos operates the 7.8 mtpa Gladstone LNG export plant on Curtis Island near Gladstone.
The facility shipped 22 LNG cargoes during the second quarter, the same as in the second quarter last year and five less compared to the prior quarter.
During the second quarter, the ExxonMobil-operated PNG LNG project in Papua New Guinea shipped 27 cargoes of LNG, the same number of LNG cargoes as in the same quarter last year and in the previous quarter.
Santos now has a 39.9 percent stake in the LNG export plant in Caution Bay after recently completing a stake sale with Papua New Guinea’s national oil and gas company Kumul Petroleum.
ExxonMobil holds a 33.2 percent operating interest in PNG LNG which is able to produce more than 8.3 million tonnes of LNG annually, an increase of 20 percent from the original design specification of 6.9 mtpa.
TotalEnergies and its partners, which include Santos, are also working on the 4 mtpa Papua LNG export project in Papua New Guinea.
Gallagher recently said the partners plan to take a final investment decision on the Papua LNG at the end of 2025.
TotalEnergies has a 37.55 percent operating stake in the Papua LNG project, US-based ExxonMobil has 37.04 percent, Santos owns a 22.83 percent interest, and Japan’s JX Nippon holds 2.58 percent.