Santos announced it has signed a binding long-term LNG Supply and Purchase Agreement (SPA) with Diamond Gas International (DGI), a wholly-owned subsidiary of Mitsubishi, for the supply of LNG from the Barossa project.
Santos announced it has signed a binding long-term LNG Supply and Purchase Agreement (SPA) with Diamond Gas International (DGI), a wholly-owned subsidiary of Mitsubishi, for the supply of LNG from the Barossa project. It was the first Santos long-term equity LNG sale from this project.
Under the agreement, DGI would purchase 1.5 MMT/Y of Santos equity LNG from Barossa for a period of 10-year 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.”
“The agreement with DGI was another significant step towards a final investment decision on Barossa, which is targeted for the first half of 2021, Santos CEO Kevin Gallagher said, adding that “the SPA delivers a firm LNG offtake arrangement which represents over 80% of Santos’ equity LNG volume from the Barossa project at our expected 50% interest level following the previously announced sell-down to JERA, while the JKM-indexation provides portfolio balance to our existing oil-linked LNG offtake agreements from GLNG and PNG LNG.”
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’ Moomba CCS project is FID-ready and will have the capacity to safely and permanently store 1.7 MMT/Y of CO2 deep underground in depleted natural gas reservoirs, subject to government approval regarding eligibility for Australian Carbon Credit Units.
Santos currently holds a 62.5% operated interest in the Barossa joint venture along with partner SK E&S (37.5%). “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.”
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Full information of the Barossa to Darwin (Darwin LNG Plant's Life Extension) project is available at the
Global LNG Database®
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