Santos Sells Oz Darwin LNG Stake to SK E&S

Australian producer Santos said on March 12 it had agreed on the $390mn sale of 25% stakes in the 3.24mn mt/yr Darwin LNG export plant and the Bayu-Undan gas field that supplies it to South Korea's SK E&S.

The deal is conditional on Santos completing its takeover of ConocoPhillips' northern Australia and Timor-Leste business, which will raise its share of Darwin LNG and Bayu-Undan from 11.5% to 68.4%, and its stake in the Barossa and Caldita fields from 25% to 62.5%. It will also depend on third-party consents, regulatory approvals and a final investment decision being taken at Barossa, expected to underpin a potential expansion at Darwin LNG.

SK E&S already has a 37.5% position at Barossa, and companies view its development as a "key priority," Santos said. The project is slated to be sanctioned after the ConocoPhillips acquisition is completed, and once technical, engineering and commercial contracts are in place. This includes a processing agreement with Darwin LNG. 

"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," Santos CEO Kevin Gallagher said. "We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40% to achieve increased partner alignment," he added.

Santos' transaction with SK E&S will be backdated to October 1 2019.