Santos pens long-term LNG supply deal with Hokkaido Gas
Australian oil and gas company Santos has signed a binding long-term deal with Japanese utility Hokkaido Gas to provide LNG from its portfolio of LNG assets, it said on May 28.
The agreement is for the delivery of up to approximately 0.4mn tonnes/year of LNG for 10 years, commencing in 2027, on a delivered ex-ship basis.
Hokkaido Gas and Santos also intend to collaborate on exploring carbon sequestration and e-methane opportunities to reduce carbon emissions across their respective portfolios.
Santos said that the agreement demonstrates the strong demand for high heating value LNG from projects such as Barossa and PNG LNG.
“Our agreement with Hokkaido Gas demonstrates Santos’ commitment to providing reliable, competitive energy supplies to support our valued customers in Asia. We also look forward to working together to explore CCS and e-methane opportunities to support Japan’s and Santos’ decarbonisation targets,” Santos CEO Kevin Gallagher said.
Hokkaido Gas said in a separate statement that the LNG will be delivered to its Ishikari LNG terminal. A total of approximately 3.5mn tonnes of LNG will be supplied for the period.
“By diversifying our procurement sources, we will be able to meet Hokkaido's increasing demand for natural gas in anticipation of achieving carbon neutrality by 2050, while also working to further improve the stability of our energy supply,” the Japanese company said.
Santos’ LNG portfolio consists of the Barossa LNG project, the Gladstone LNG project, and the PNG LNG project. Last month, Santos announced that the Barossa gas project offshore Northern Territory is now more than 70% complete.
The Barossa gas project represents a significant offshore gas and condensate initiative aimed at providing a fresh source of gas to the existing 3.7mn tonnes/year Darwin LNG facility in the Northern Territory. With a $3.6bn investment programme initiated following the project's final investment decision in March 2021, the first gas from the Barossa project is scheduled for 2025.