Key Highlights

  • Santos item 1: santos Limited is growing its liquefied Natural Gas Business less by finding new gas fields of its own and more by lining up new customers for gas it already has, or can source from others.
  • Santos item 2: on 15 September 2026 the Adelaide-based producer announced two new, non-binding Supply arrangements - one with South Korean steelmaker-linked trader POSCO, the other tied to a proposed Canadian export terminal backed by US developer Western LNG.
  • Santos item 3: neither is a signed sale contract yet, but both point to how Santos wants to grow: as an LNG portfolio marketer layering third-party and Equity volumes on top of its Papua New Guinea and Australian production base.
  • Santos item 4: santos said it had agreed key commercial terms with POSCO for LNG supply on a "delivered ex ship" basis over 10 years, with deliveries starting in 2030 or 2031, sourced from "Santos' diversified global LNG portfolio".

Santos (ASX:STO) is addressing the POSCO and Western LNG heads of agreement through its disclosed corporate and operating programme. For Santos, the current position separates completed steps from conditional terms and identifies the matters that still require formal decisions or further evidence. That distinction matters for Santos because an announced proposal, approval, forecast or operating milestone may remain subject to conditions before it changes the completed financial or operational position.

Company Business

Santos Limited is growing its liquefied natural gas business less by finding new gas fields of its own and more by lining up new customers for gas it already has, or can source from others. On 15 September 2026 the Adelaide-based producer announced two new, non-binding supply arrangements - one with South Korean steelmaker-linked trader POSCO, the other tied to a proposed Canadian export terminal backed by US developer Western LNG. Neither is a signed sale contract yet, but both point to how Santos wants to grow: as an LNG portfolio marketer layering third-party and equity volumes on top of its Papua New Guinea and Australian production base.

Santos said it had agreed key commercial terms with POSCO for LNG supply on a "delivered ex ship" basis over 10 years, with deliveries starting in 2030 or 2031, sourced from "Santos' diversified global LNG portfolio". No annual Volume has been disclosed publicly.

Current Position

The second, larger-scale arrangement is a non-binding heads of agreement with Western LNG covering roughly 1 million tonnes per annum of LNG for up to 20 years, on a free-on-board basis, with supply expected to start around 2031. Importantly, the gas would not come from a US project. Santos chief executive Kevin Gallagher described the deals as reflecting the company's "firm track record in building long-term successful relationships with leading energy customers, which we're combining with flexible third-party supply to create value".

Santos already has real LNG production behind it. Earlier this month Santos lifted its Papua LNG interest from 17.67 per cent to 21 per cent for about US$189 million, as ExxonMobil prepared to take over operatorship from TotalEnergies to align management of the two neighbouring projects.

Sector Context

Separately, Santos has been ramping up its Alaskan Pikka oil project, which reached first oil in May 2026. Pikka is a Crude Oil development, not an LNG project, and should not be confused with the long-discussed, separate Alaska LNG gas export proposal; nothing in Santos's own materials reviewed for this article ties the company to that project. The new POSCO and Western LNG agreements sit apart from all of this Upstream equity gas - they are arrangements to market LNG, whether sourced from Santos's own fields or bought in, to end customers on commercial terms.

Strategic backdrop: life after the ADNOC approach

Risks to Consider

Santos remains exposed to execution, timing, regulatory, funding and market uncertainties relevant to the POSCO and Western LNG heads of agreement. Conditional proposals, guidance, approvals and commissioning targets involving Santos may change before they produce a completed transaction or operating outcome.

The new deals land a year after Santos's most serious brush with a Takeover in recent memory. In June 2025, a consortium led by Abu Dhabi National Oil Company's XRG unit, alongside Abu Dhabi Development Holding Company and Carlyle, lodged a non-binding proposal to acquire Santos for US$5.626 a share. After months of Due Diligence and two deadline extensions, the consortium walked away on 17 September 2025, with Santos saying XRG would not accept "an appropriate allocation of risk" around regulatory approvals and domestic gas supply commitments. Since then Santos has continued to run its own growth programme - lifting its Papua LNG stake, pushing toward a Papua LNG FID, bringing Pikka into production, and now signing up new LNG customers - consistent with a company operating as a standalone entity rather than one preparing itself for sale.

For Santos, converting flexible, non-equity supply arrangements into binding contracts would give it more predictable Cash Flow and a broader customer base across North Asia, without requiring it to sanction new upstream projects itself. That matters because Santos is already carrying large, capital-intensive commitments elsewhere - Papua LNG and Pikka among them - so growing the customer base rather than sanctioning new production is, on its face, a lighter-capital way to expand the LNG business.

What to Watch Next

Both new agreements are heads of agreement only, however. They still need definitive sale-and-purchase agreements, satisfaction of conditions precedent, and internal corporate approvals before they bind either side. Pricing terms - including whether contracts will be oil-linked, as is conventional for long-term Asian LNG deals - have not been disclosed for either agreement, and the POSCO volume is also unstated in the material reviewed. Ksi Lisims itself has not reached a final Investment decision, and its own financing and construction timetable will determine whether Santos's 2031 start date holds. The gap between signing an HoA and closing a binding SPA is where much of the commercial risk in deals like these sits.