News

2020 December 9 17:07

Santos and Mitsubishi sign SPA for Barossa LNG supply 7

Santos had signed a binding long-term LNG Supply and Purchase Agreement (SPA) with Diamond Gas International Pte Ltd (DGI), a wholly-owned subsidiary of Mitsubishi Corporation (Mitsubishi), for the supply of LNG from the Barossa project, the company said in its release.

The long-term SPA is a contractual commitment for the supply and purchase of 1.5 million tonnes per annum of Santos equity LNG from Barossa for a period of ten years with extension options, at a price based on the Platts Japan Korea Marker (JKM). Santos also has options to pursue further LNG transactions through commercial flexibilities negotiated with DGI.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the agreement with DGI was another significant step towards a final investment decision on Barossa, which is targeted for the first half of 2021.

In addition to the long-term SPA, Santos and Mitsubishi Corporation have signed a Memorandum of Understanding to jointly investigate opportunities for carbon neutral LNG from Barossa.

These include collaborating on opportunities relating to Santos’ Moomba carbon capture and storage (CCS) project, pursuit of carbon neutral LNG, bilateral agreements for carbon credits and potential future development of zero emissions hydrogen.

Santos currently holds a 62.5% operated interest in the Barossa joint venture along with partner SK E&S (37.5%). Santos is also a joint venture partner and operator in Darwin LNG with a 68.4% interest.

Completion of the planned sell-downs to SK E&S and JERA, announced in early 2020, will see Santos’ interests in Darwin LNG and the Barossa project change to 43.4% and 50%, respectively. The sell-downs are subject to customary consents, regulatory approvals and FID on Barossa.