Santos (ASX:STO) - CEO & Managing Director, Kevin Gallagher
CEO & Managing Director, Kevin Gallagher
Source: Santos
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  • Oil and gas giant Santos (STO) signs a binding sale and purchase agreement (SPA) to sell a 12.5 per cent interest in the Barossa Project in the Northerrn Territory
  • The sale will be made to an Australian subsidiary of JERA, which is a 50:50 joint venture between TEPCO Fuel & Power and Chubu Electric Power in Japan
  • Completion of the sale is expected in the first half of 2022 and upon completion, JERA will reimburse Santos for its share of capital expenditure which is estimated at US$300 million (A$420.78 million)
  • A final investment decision for Barossa was taken in March 2021 and it is progressing on schedule and is on budget for first liqueified natural gas production in H1 2025
  • Santos ends the day 2.28 per cent in the green with shares trading at $6.73

Oil and gas giant Santos (STO) has signed a binding sale and purchase agreement (SPA) to sell a 12.5 per cent interest in the Barossa Project in the Northern Territory.

The sale will be made to an Australian subsidiary of JERA, which is a 50:50 joint venture between TEPCO Fuel & Power and Chubu Electric Power.

It was founded in 2015 in Japan, JERA aims to bring the world’s leading energy solutions to Japan through its global operations.

JERA Corporate Vice President and Managing Executive Officer Yukio Kani said the Barossa Project is a good investment for the company.

“JERA is keen to partner with quality Australian and international partners like Santos and SK E&S, and our investment decision-making processes reflect decades of experience in the international liquefied natural gas (LNG) market,” Mr Kani said.

“Barossa works well as part of our strategy to secure ongoing and reliable LNG supplies and the agreement reflected the ongoing global importance of LNG as a transitional fuel.”

Completion of the sale is expected in the first half of 2022 and upon completion, JERA will reimburse Santos for its share of capital expenditure which is expected to be roughly US$300 million (A$420.78 million).

A final investment decision for Barossa was taken in March 2021 and it is progressing on schedule and is on budget for first LNG production in H1 2025.

Santos CEO and Managing Director Kevin Gallagher is delighted to have signed the agreement with JERA.

“We are delighted to have finalised our agreement with JERA consistent with the terms of the Letter of Intent that was agreed shortly after the announcement of the acquisition of ConocoPhillips’ interests in Barossa,” Mr Gallagher commented.

“Barossa is one of the lowest cost, new LNG supply projects in the world and will provide Santos and our partners with a competitive advantage in a tightening global LNG market.”

Upon completion of the sale, Santos will hold 50 per cent, SK E&S will hold 37.5 per cent and JERA will hold 12.5 cents.

Santos has ended the day 2.28 per cent in the green, with shares trading at $6.73 in a $14.01 billion market cap.

STO by the numbers
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