Santos Expands Global LNG Portfolio with Long-Term Supply and Purchase Deals

Australian energy company Santos announced it has executed two separate long-term liquefied natural gas (LNG) agreements, one to supply South Korea's POSCO Steel and another to purchase supply from a planned project in Canada.

New Supply and Purchase Agreements

In a statement on Tuesday, Santos outlined the two distinct deals that expand its global LNG footprint, securing both a major customer and a new source of supply for the next decade and beyond.

POSCO Steel Supply Deal

• Duration: A 10-year agreement to supply LNG to POSCO Steel.
• Terms: The deal is structured on a delivered ex ship (DES) basis, meaning Santos is responsible for transport to the point of delivery.
• Timeline: Deliveries are scheduled to commence in 2030 or 2031, sourced from Santos' global LNG portfolio.

Western LNG Purchase Deal

Ad

• Volume: An agreement to acquire approximately 1 million metric tons per annum (mtpa) of LNG.
• Source: The LNG will be purchased from the planned Ksi Lisims LNG project in British Columbia, Canada.
• Terms: The purchase agreement spans up to 20 years on a free-on-board (FOB) basis, where Santos takes ownership at the export terminal.
• Timeline: Shipments are expected to begin around 2031.

Strategic Implications for Santos

These agreements are a significant step in Santos' strategy to build a diversified, global LNG portfolio. By securing long-term contracts for both supply and offtake, the company enhances its position as a major player in the international gas market.

The structure of the deals provides strategic flexibility. The FOB purchase from Canada allows Santos to direct LNG cargoes to the most favorable markets, optimizing for price and demand. Conversely, the DES sales agreement with POSCO locks in a long-term customer in the key Asian market, providing revenue certainty. For investors, these moves signal a proactive approach to managing supply chains and market volatility well into the next decade.