This agreement aligns with Santos’ strategy to ensure long-term LNG pricing stability. Credit: T. Schneider/Shutterstock.com.

Australian oil and gas company Santos has entered into a long-term liquified natural gas (LNG) supply and purchase agreement (SPA) with Japan’s Hokkaido Gas.  

The deal, set to commence in 2027, involves the annual supply of up to 0.4 million tonnes of LNG over a period of ten years.  

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Santos managing director and CEO Kevin Gallagher said this agreement aligns with Santos’ strategy to ensure long-term LNG pricing stability and reflects robust demand for high heating value LNG from projects such as Barossa and PNG LNG. 

The SPA also includes a collaborative effort between the two companies to investigate carbon sequestration and e-methane projects, to lower carbon emissions across their operations.  

Gallagher added: “This SPA is a significant step in developing Santos’ equity LNG portfolio and establishes a long-term relationship with Hokkaido Gas, a Japanese gas utility providing natural gas within the Hokkaido region of Japan. 

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“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.” 

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In February, Santos secured A$228.88m ($150m) in funding for its portion of the Moomba carbon capture and storage (CCS) project in South Australia.  

These funds are earmarked to cover past expenses and to propel the $220m initiative towards its inaugural CO₂ injection, anticipated for mid-2024. 

In January 2024, Santos was authorised to resume construction of a vital subsea pipeline for its Barossa gas project.  

The pipeline, which is designed to connect the Barossa gas field to a processing plant in Darwin, had faced a temporary suspension in November 2023 due to legal challenges.