Another Asian player signs up for Santos’ LNG

Australia’s energy giant Santos has signed a binding long-term supply and purchase agreement (SPA) with Japan’s Shizuoka Gas for the delivery of liquefied natural gas (LNG) from its portfolio.

The deal entails Santos supplying between 0.35 and 0.4 million tonnes per annum (mtpa) of LNG at plateau on a delivered ex-ship (DES) basis. The 12-year contract is slated to start in 2032.

This is the latest in a series of LNG supply agreements the Australian energy player inked with Asian partners, following the ones with Hokkaido Gas in May, Glencore Singapore in September, and TotalEnergies Gas & Power Asia in October.

The Shizuoka Group says it is committed to achieving low carbonization by stable procurement of natural gas, which has an important role during the energy transition period. In line with this, the group announced its 2050 Carbon Neutral Vision in August 2021, outlining a roadmap towards carbon neutrality. 

“The agreement underscores Santos’ commitment to providing reliable, cost competitive energy within the Asia-Pacific region. Additionally, we look forward to future discussions on Santos’ carbon capture and storage, and synthetic gas opportunities,” noted Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher.

Santos recently completed a two-well project as part of the Angore development. The wells are expected to supply up to 350 million standard cubic feet of gas per day to sustain production at PNG LNG, an integrated development to commercialize the gas resources of Papua New Guinea.

The Australian player also handed out an engineering, procurement, removal, and disposal (EPRD) contract to U.S.-headquartered McDermott. The deal for decommissioning of the Harriet Alpha platform and associated infrastructure offshore Western Australia is said to be the biggest of its kind for the U.S. firm.