Australia’s energy player Santos is stepping up its liquefied natural gas (LNG) push in Asia through a long-term supply deal with South Korea’s POSCO and a proposed agreement to buy 1 million tonnes per year (mtpa) from an LNG project being developed on Canada’s northwest coast to export lower-carbon LNG to markets in Asia.
Santos has struck two new separate non-binding LNG agreements in accordance with its strategy to maximize revenue through portfolio optimization and will leverage high value, long term contracts, complementing its existing contractual commitments.
The firm has agreed key commercial terms with POSCO Steel for a ten-year supply of LNG sourced from the Australian player’s diversified global LNG portfolio on a ‘delivered ex ship’ basis, beginning in 2030 or 2031. Execution of the transaction remains subject to the negotiation and execution of an LNG sale and purchase agreement (SPA), and all required corporate approvals.
Santos has also entered into a non-binding heads of agreement with Western LNG for the purchase of approximately 1 million tonnes of LNG per annum from the proposed Ksi Lisims LNG project on a ‘free on board’ basis in Canada’s British Columbia for a term of up to 20 years, starting from approximately 2031.
The HOA is non-binding and remains subject to the negotiation and execution of definitive agreements, including an LNG sale and purchase agreement, satisfaction of customary conditions precedent, and all required corporate approvals.
According to Santos, these agreements underscore the company’s growing global LNG portfolio position and its role as a supplier of secure, flexible and reliable energy to customers across the Asia-Pacific, building on its established reputation with tier one customers in Asia.
The Australian player sees Ksi Lisims LNG supply as complementary to its existing LNG portfolio across Papua New Guinea and Australia, and would provide it with the ability to grow LNG sales volumes without a corresponding increase in upstream capital investment.
In addition, the project will increase long-term supply flexibility for the firm’s existing and future customers across Asia, diversify its LNG supply base geographically with competitive cost of supply as Canadian LNG has a secure, relatively short shipping route to premium north Asian markets, and optimize volumes across the portfolio, balancing market conditions, customer requirements and regional pricing opportunities.
Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, commented: “Santos has a strong track record in building long-term successful relationships with leading energy customers, which we’re combining with flexible third-party supply to create value across our global LNG portfolio.
“Our recent agreements reflect the strength of our portfolio, our reputation for reliability, our ability to meet evolving customer needs and our commitment to delivering energy security for Australia’s neighbours in Asia.”
Ksi Lisims LNG is a proposed 12 mtpa floating LNG (FLNG) export project located in British Columbia on land owned by the Nisga’a Nation. The project, which is being developed by the Nisga’a Nation, Rockies LNG, and Western LNG, is designed to supply LNG primarily to Pacific Basin and Asian markets, and uses hydroelectric power for liquefaction, supporting a lower-emissions LNG production profile.
This development has secured long-term offtake agreements with international LNG participants, including Shell, TotalEnergies, and Uniper. The project received its British Columbia Environmental Assessment Certificate in 2025 and has entered into further agreements with First Nations communities in 2026.
Gallagher added: “Ksi Lisims gives us access to a high-quality, competitive cost of supply of LNG that complements our equity production. Its location on Canada’s Pacific coast, access to low-cost Western Canadian natural gas and focus on lower-emissions LNG production make it an attractive addition to our portfolio.
“Similarly, POSCO is one of the world’s premier steel manufacturers. We are proud to establish a new long-term partnership with a customer of such global standing and look forward to supporting POSCO with secure, competitive cost of supply and reliable energy supply.”
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