Santos has signed two preliminary deals to expand its liquefied natural gas supply: a 10-year agreement to deliver LNG to South Korea's POSCO Steel, and an offtake deal to buy from the proposed Ksi Lisims LNG project in Canada. Santos said the Canadian deal would let it grow Asian LNG sales without new upstream spending.
Ten-year supply deal with POSCO
Under the HOA, Santos would supply LNG to POSCO for 10 years, delivered "ex ship." The gas would be sourced from Santos' diversified global LNG portfolio, with supply commencing in 2030 or 2031, Santos said.
Offtake from Canada's Ksi Lisims project
Santos also agreed to buy about one million metric tons per annum of LNG for up to 20 years from the British Columbia-based Ksi Lisims project, with deliveries on a "free on board" basis beginning in 2031. Santos said the Canadian supply would let it grow LNG sales volumes without a corresponding rise in upstream capital spending, while diversifying its supply base and adding long-term flexibility for customers across Asia.
Kevin Gallagher, Santos managing director and chief executive, said the company sees potential to build on these relationships over time, including by supporting the energy security and decarbonization goals of customers in the region. According to Rigzone: "We see significant potential to build on these relationships over time".
Ksi Lisims moves toward a final investment decision
Ksi Lisims LNG, a partnership between the Nisga'a Nation, Rockies LNG Partners and Western LNG, has a capacity of 12 million metric tons per annum and is expected to become operational in 2029. The project would sit on Indigenous land about nine miles west of the Gingolx village. Western LNG has been designated future operator.
The project signed benefits agreements with Indigenous groups on June 9 that help clear the way for investors to reach a final investment decision by yearend. Western LNG founder, president and chief executive Davis Thames said the interest from companies like Santos reflects a growing global role for Canadian LNG, calling the Santos deal a strong signal of confidence as the project moves toward that decision.
Ksi Lisims already has definitive agreements with Shell, TotalEnergies and Uniper for a combined six million metric tons per annum.
Source: Rigzone
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