Australian energy company Santos is expanding its LNG portfolio with two transactions aimed at strengthening its long-term supply position in Asia-Pacific. The company agreed commercial terms with POSCO Steel and, separately, advanced the purchase of liquefied natural gas sourced from Canada.
Specifically, Santos expects to supply LNG to South Korea’s POSCO for ten years starting in 2030 or 2031. At the same time, the company is seeking to add approximately 1 million tonnes per year from the Ksi Lisims LNG project in British Columbia.
Both transactions are part of Santos’ strategy to expand and diversify its global liquefied natural gas portfolio. However, the agreements still require negotiation of definitive contracts and the corresponding corporate approvals.
Santos advances a 10-year LNG deal with POSCO
On the one hand, Santos agreed the key commercial terms with POSCO Steel to supply it with LNG for a ten-year period.
The gas will come from Santos’ global LNG portfolio and will be marketed on a delivered ex ship (DES) basis. This means the seller delivers the cargo at the agreed port of destination.
Supply would begin in 2030 or 2031. However, the transaction is still subject to negotiating and signing an LNG sale and purchase agreement (SPA) and to the required corporate approvals.
For Santos, the agreement opens a long-term commercial relationship with one of South Korea’s major steelmakers and expands its supply commitments to Asian customers.
Ksi Lisims LNG would add 1 million tonnes per year
On the other hand, Santos signed a non-binding framework agreement with Western LNG and its partners to purchase around 1 million tonnes per year of LNG from the Ksi Lisims LNG project.
In this case, supply would be on a free on board (FOB) basis from British Columbia and could extend for up to 20 years. The first cargoes are expected around 2031.
The transaction also requires definitive agreements, including an SPA, as well as satisfaction of customary conditions precedent and the necessary corporate approvals.
Adding these volumes would allow Santos to increase LNG sales without a parallel increase in upstream production capital investment. At the same time, Canadian supply would complement its current volumes from Australia and Papua New Guinea.
Canada expands Santos’ supply route to Asia
In addition, Canada’s Pacific coast offers Santos a new geographic source of supply oriented toward Asian markets.
The location of Ksi Lisims LNG provides a relatively short shipping route to North Asian markets. For Santos, this position can add flexibility in allocating cargoes based on customer demand, market conditions, and regional prices.
Likewise, the company is seeking to combine its own production with third-party supply. This strategy enables management of available volumes within a broader, more diversified portfolio.
Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, said the company is combining its long-term relationships with energy customers and flexible third-party supply to generate value across its global LNG portfolio.
Ksi Lisims LNG targets 12 mtpa of capacity
Ksi Lisims LNG is a floating liquefied natural gas (FLNG) export project planned in British Columbia. Its projected capacity reaches 12 million tonnes per year.
The development is being led by the Nisga’a Nation, Rockies LNG, and Western LNG and will be located on land owned by the Nisga’a Nation.
The project is primarily designed to supply the Pacific Basin and Asian markets. Additionally, it incorporates the use of hydroelectric power in the liquefaction process, a feature intended to support a lower-emission production profile.
Ksi Lisims LNG received its British Columbia Environmental Assessment Certificate in 2025. The project also has long-term offtake agreements with international companies such as Shell, TotalEnergies, and Uniper.
If the proposed transactions are completed, Santos would add a Canadian source of LNG to its portfolio while developing a new long-term supply relationship with POSCO. The combination would expand the company’s geographic and commercial flexibility in the Asia-Pacific LNG market.
Source: Santos
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