PERTH (miningweekly.com) – Oil and gas major Santos has completed the sell-down of a 25% stake in its Bayu-Undan and Darwin liquefied natural gas (LNG) projects to partner SK E&S.

Santos on Friday said that the sell-down would result in the company receiving $186-million at the completion of the transaction, being the sales price of $390-million less the cashflow from the 25% interest from the effective date of October 2019 to completion.

Santos in March of last year announced its agreement with SK E&S over the 25% interest in Bayu-Undan, with the sale having been conditional on Santos’ acquisition of ConocoPhillips’ northern Australia and Timor-Leste portfolio.

Santos MD and CEO Kevin Gallagher said he was delighted to formally welcome Barossa joint venture partner SK E&S as a partner in Bayu-Undan and Darwin LNG.

“The sell-down to SK E&S is in-line with our strategy of disciplined growth while maintaining a strong balance sheet by managing equity levels in our growth projects consistent with disciplined capital management,” Gallagher said.

Santos and SK E&S have also signed a memorandum of understanding to jointly investigate opportunities for carbon-neutral LNG from Barossa, including collaboration relating to Santos’ Moomba carbon capture and storage (CCS) project, bilateral arrangements for carbon credits and potential future development of zero-emissions hydrogen.

Completion of the sell-down to SK E&S sees Santos’ interest in Bayu-Undan and Darwin LNG change to 43.4%, and Santos remains operator of both assets. The remaining interests are held by SK E&S, INPEX, which holds 11.4%, Eni, which holds 11%, JERA, with 6.1%, and Tokyo Gas, with 3.1%.

Santos and SK E&S are also partners in the Barossa project, where a final investment decision was announced in March. First gas from Barossa to backfill Darwin LNG is expected in the first half of 2025.

Santos and JERA continue to progress the binding sale and purchase agreement for JERA to acquire a 12.5% interest in Barossa.