Australian LNG player Santos has agreed to sell a 25 percent interest in Darwin LNG and Bayu-Undan to SK E&S for $390 million with effect from October 1, 2019, reports LNG World News
The sale is conditional on completion by Santos of the acquisition of ConocoPhillips’ northern Australia and Timor-Leste portfolio, third-party consents, regulatory approvals and a final investment decision on Barossa, the company said in its statement on Thursday, March 12.
SK E&S already has a 37.5 percent interest in the Barossa project to backfill Darwin LNG. Santos’ sale of interests in Darwin LNG and Bayu-Undan to SK E&S advances partner alignment for the development of Barossa, which remains a key priority for both companies.
Santos managing director and CEO Kevin Gallagher said the agreement with SK E&S builds partner alignment and is 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. We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40 percent to achieve increased partner alignment,”Kevin Gallagher – CEO Santos
He noted that 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.
As said in October 2019, Santos’ net funding requirement for the ConocoPhillips acquisition is expected to be approximately $775-825 million, net of the proceeds realized from the sell-down to SK E&S and post the benefit of cash flows generated from the acquired business from the ConocoPhillips acquisition effective date of January 1, 2019, to completion with customary adjustments.
Credit Suisse (Australia) Limited and J.B. North & Co. are acting as financial advisers to Santos and Allens is acting as legal adviser to Santos.
To read the full article and other great LNG articles click here