Santos To Supply 500,000 Tons Of LNG Annually In Mid-Term Deal With TotalEnergies

Australian energy major Santos has struck a mid-term agreement with TotalEnergies' Singapore unit to supply up to 500,000 tons of liquefied natural gas (LNG) annually for three years, starting in Q4 2025.

Under the agreement, Santos will transport LNG to TotalEnergies Gas & Power Asia on a delivered ex-ship (DES) basis.

"There continues to be extremely strong demand in Asia for high heating value LNG from projects such as Barossa and PNG LNG as countries focus on reducing their carbon emissions," Santos chief executive Kevin Gallagher told Upstream Online.

The deal is a result of the high demand for low heating value liquid natural gas in Asia, which will help reduce CO2 emissions and gas consumption by 10-15%.

According to Santos, the price of LNG in the new contract is linked to oil and not to spot market gas prices, which offers the suppliers greater stability.

The CEO of Santos stated that the company's initiatives, such as PNG LNG and Barossa, were ideally suited to satisfy this need.

Before this, Santos had signed two significant contracts for LNG supply -- a 10-year arrangement with Japan's Hokkaido Gas and a mid-term agreement with Glencore Singapore in September.

"This oil indexed contract, along with the recently executed long-term LNG sales and purchase agreement with Hokkaido Gas in Japan, and the mid-term contract with Glencore, demonstrates Santos' strong LNG portfolio position and customer relationships in the region," Gallagher said about the recent contract to Reuters.

"Our portfolio is nicely balanced over the short to medium term with around 80 percent of volumes indexed to oil price and around 20 percent exposed to spot pricing."