Santos Advances LNG Deals With POSCO, Western LNG
Santos has advanced two long-term LNG agreements covering future supply to South Korea’s POSCO Steel and purchases of approximately 1 million tonnes per annum from the proposed Ksi Lisims LNG project in British Columbia.
What Readers Should Know
- Santos agreed key commercial terms to supply LNG to POSCO Steel for 10 years.
- POSCO deliveries are expected to begin in 2030 or 2031 on a delivered ex ship basis.
- Santos also signed a non-binding agreement to purchase approximately 1 million tonnes of LNG per year from Ksi Lisims LNG.
- The Canadian supply arrangement could run for up to 20 years, with deliveries beginning around 2031.
- Both proposed transactions remain subject to definitive agreements and required approvals.
Santos Expands Long-Term LNG Portfolio
MONTREAL (Oil Monster): Santos has advanced two preliminary long-term LNG agreements aimed at expanding and diversifying its supply portfolio across the Asia-Pacific market.
The Australian energy company agreed key commercial terms with POSCO Steel Co. Ltd. for the supply of LNG to the South Korean steelmaker for a period of 10 years.
Under the proposed arrangement, Santos would supply LNG on a delivered ex ship basis from its diversified global LNG portfolio, with deliveries expected to begin in 2030 or 2031.
The POSCO transaction remains subject to the negotiation and execution of a final LNG Sales and Purchase Agreement and required corporate approvals.
Santos Plans 1 Mtpa Purchase From Canadian LNG Project
Separately, Santos entered into a non-binding Heads of Agreement with Western LNG and its partners to purchase approximately 1 million tonnes of LNG per annum from the proposed Ksi Lisims LNG project in British Columbia, Canada.
The LNG would be supplied on a free-on-board basis for up to 20 years, with deliveries expected to begin around 2031.
The agreement remains subject to negotiation and execution of definitive agreements, including an LNG Sales and Purchase Agreement, customary conditions and required corporate approvals.
Canadian LNG Would Add Supply Flexibility
Santos said the proposed Canadian supply would broaden its LNG supply base while providing greater flexibility to serve existing and future customers across Asia.
The company also expects the arrangement to allow it to increase LNG sales volumes without a corresponding increase in upstream capital investment.
Santos highlighted the relatively short shipping route from Canada’s Pacific coast to North Asian markets as another advantage of the project.
Ksi Lisims LNG Targets 12 Mtpa Capacity
Ksi Lisims LNG is a proposed 12-million-tonne-per-year floating LNG export project on land owned by the Nisga’a Nation in British Columbia.
The project is being developed by the Nisga’a Nation, Rockies LNG and Western LNG.
Ksi Lisims LNG has already entered into Sales and Purchase Agreements with Shell, TotalEnergies and Uniper covering a combined 6 Mtpa of LNG capacity.
Santos Targets Growing Asian Energy Demand
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the agreements demonstrate the continued growth and diversification of the company’s global LNG portfolio while supporting the energy needs of customers and partners across Asia.
Gallagher said Ksi Lisims would provide Santos with access to competitive Canadian LNG that complements its existing production, while the proposed POSCO agreement would establish a new long-term relationship with one of the world’s major steel producers.
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