Australian energy firm Santos has agreed a $390m deal to sell assets to South Korean energy group SK E&S. Santos will sell a 25% stake in the Darwin LNG facility and the Bayu-Undan gas field, offshore Northern Australia.
The deal was made in October 2019, but was announced on Thursday. It is conditional on the purchase of ConocoPhillips’ Australia-West assets and operations for $1.39bn, announced in October last year. The deal is also subject to other third-party consents and regulatory approvals, as well as a final investment decision on the Barossa development project.
Santos will receive around $120m of cash flow from the interests, from 1 January 2019 to 1 October 2019.
Santos managing director and CEO Kevin Gallagher said: “Santos continues to build alignment between the Darwin LNG and Barossa joint ventures through discussions with Darwin LNG participants and others to acquire equity in Barossa.
“We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40% to achieve increased partner alignment.”
SK E&S already owns a 37.5% interest in the Barossa offshore development project that will backfill Darwin LNG.
Gallagher added: “Santos expects to take a final investment decision for the development of Barossa following completion of the ConocoPhillips acquisition and once all necessary technical, engineering and commercial contracts are in place, including the processing agreement with Darwin LNG, to allow the project to proceed subject to market conditions.”
Credit Suisse (Australia) and JB North act as financial advisors while Allens is the legal advisor to Santos for the transaction.
Earlier this month, ConocoPhillips awarded a contract to engineering firm Subsea 7 for the barossa project. The wngineerign company will supply the Barossa project with infield flowlines and subsea umbilicals, risers and flowlines (SURF) infrastructure.