Australia's Santos signs long-term LNG supply agreement with Hoikkaido Gas

Santos has signed a long-term supply and purchase agreement with Japan's Hokkaido Gas to provide LNG from the Australian energy producer's portfolio, it said May 28.

The agreement will supply up to about 400,000 mt/year of LNG for 10 years, starting 2027 on a delivered ex-ship basis, the company said in the statement.

The two companies are also aiming to collaborate on exploring carbon storage and e-methane opportunities to reduce their carbon footprint across respective portfolios, Santos said.

Santos MD and CEO Kevin Gallagher said the contract was consistent with the company's strategy of maintaining its long-term LNG pricing and was in line with its plan to supply reliable and competitive LNG within Asia.

"This agreement further demonstrates the strong demand for high heating value LNG from projects such as Barossa and PNG LNG," he added.

Santos did not provide any details around the pricing of the deal.

Platts, part of S&P Global Commodity Insights, assessed the July JKM, the benchmark price reflecting LNG delivered to Northeast Asia, at $11.971/MMBtu on May 27, down 10.8 cents/MMBtu from May 24.