Santos in LNG sale

Santos has already offloaded a portion of the Darwin LNG operation for $US390 million to South Korean SK E&S, in line with plans flagged during an acquisition of ConocoPhillips’ northern Australian assets in October.

SK E&S will acquire 25 per cent of the Darwin LNG plant and existing Bayu-Undan field, which will add to its 37.5 share of the Barossa project.

A final investment decision had been flagged on the Barossa project for this year.

Santos had bought ConocoPhillips’ share of Darwin LNG plant and the Bayu-Undan, Barossa and Poseidon fields in a $US1.4 billion ($2.2 billion) deal last year.

At that time, Santos said it had a letter of intent from SK E&S to make the purchase.

Santos chief executive Kevin Gallagher said it was a step towards bringing Barossa gas into production.

“We are delighted to have agreed terms with SK E&S to acquire interests in Darwin LNG and Bayu-Undan and look forward to continuing and building on the long-term relationship between our two companies,” Mr Gallagher said.

“Santos continues to build alignment between the Darwin LNG and Barossa joint ventures through discussions with Darwin LNG participants and others to acquire equity in Barossa. 

“We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40 per cent to achieve increased partner alignment. 

“Santos expects to take a final investment decision for the development of Barossa following completion of the ConocoPhillips acquisition and once all necessary technical, engineering and commercial contracts are in place, including the processing agreement with Darwin LNG, to allow the project to proceed subject to market conditions.”

Shares in Santos were up 6.8 per cent to $4.58 at the close, after earlier falling 13 per cent.