Santos Bags LNG Supply Contract with TotalEnergies

Santos Ltd. has signed a mid-term liquefied natural gas (LNG) supply contract with TotalEnergies Gas & Power Asia Private Limited.

The contract is to supply 20 LNG cargoes, or up to approximately 0.5 million metric tons of LNG per annum over a period of three years plus one quarter, Santos said in a news release.

The contract will begin in the fourth quarter of 2025, with the LNG to be supplied from the company’s global portfolio of LNG assets on a delivered ex-ship basis.

According to the release, Santos Managing Director and CEO Kevin Gallagher said the contract with TotalEnergies is a new LNG relationship for Santos and builds on its existing joint venture partnerships.

“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. Our portfolio is nicely balanced over the short to medium term with around eighty percent of volumes indexed to oil price and around twenty percent exposed to spot pricing,” Gallagher said.

“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 is committed to supporting the energy security of our valued customers across Asia, where gas will play an essential role in decarbonization efforts across the region,” Gallagher added.

Last month, Santos signed a mid-term LNG supply contract with Glencore Singapore Pte Ltd. to supply 19 LNG cargoes, or up to approximately 0.5 million metric tons of LNG per annum, over a period of 3 years plus one quarter.

The Glencore contract will begin in the fourth quarter of 2025 with LNG being supplied from Santos’ global portfolio of LNG assets on a delivered ex-ship basis.

In May, Santos signed a binding long-term (LNG) supply and purchase agreement (SPA) with Japan-based Hokkaido Gas Co., Ltd. Beginning in 2027, approximately 0.4 million metric tons per annum of LNG for 10 years will be supplied through the SPA from Santos’s LNG portfolio on a delivered ex-ship basis, according to an earlier news release.

Hokkaido Gas and Santos also plan to collaborate and explore carbon sequestration and e-methane opportunities to reduce carbon emissions across their respective portfolios.

Refinancing of Debt Facility

Meanwhile, Santos has executed documentation to refinance its 2025 maturing syndicated bank loan facility from $250 million to $850 million.

The facility represents a fully revolving loan maturing in January 2030, refinancing the previous facility that had a maturity date of August 2025. The loan bears a floating interest rate over the Secured Overnight Funding Rate (SOFR) with a margin that references Santos’ external credit rating, currently 1.55 percent per annum for the 5.5-year facility.

Gallagher said the syndicated facilities were “consistent with the company’s strategy of securing flexible and competitively priced funding while providing additional liquidity and strengthening the balance sheet,” according to a separate statement.

“The facilities are fully revolving, which provides significant flexibility and lower borrowing costs when not drawn,” he noted.

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