Santos has agreed to sell a 25 per cent share in Darwin LNG and Bayu-Undan to SK E&S for $US390 million ($605 million).
The sale is conditional on Santos’ acquisition of ConocoPhillips’ northern Australia and Timor-Leste portfolio securing third-party consents, regulatory approvals and a final investment decision on the Barossa project.
SK E&S already has a 37.5 per cent interest in the Barossa project to backfill Darwin LNG.
Santos stated that the sale of its interests in Darwin LNG and Bayu-Undan to SK E&S would advance partner alignment for the development of Barossa, which remains a key priority for both companies.
Kevin Gallagher, Santos managing director and chief executive officer, said the agreement with SK E&S was another significant step towards bringing Barossa gas into production through the Darwin LNG facilities.
“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,” Gallagher said.
“We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40 per cent to achieve increased partner alignment.
“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.”
Following Santos’ announcement in October 2019, the company’s net funding requirement for the ConocoPhillips acquisition is expected to be $US775-825 million.
Santos will acquire a 25 per cent interest in Darwin LNG and Bayu-Undan which will be sold to SK E&S under the ConocoPhillips acquisition.