Santos (ASX:STO) signs gas supply agreement with Walyering

Highlights

• Santos Limited entered into a gas supply agreement with the Walyering joint venture.
• Shares of Santos were spotted trading in the green post ASX announcement.
• The company is planning to buy 36.5 petajoules of gas from Walyering.

On 14 December 2022, Australian domestic gas supplier Santos Limited (ASX:STO) announced that it has entered into a new gas supply agreement with the Perth basin-based Walyering joint venture.

Santos has planned to purchase 36.5 petajoules of gas from the Walyering site to increase the amount of domestic gas delivered to the Western Australian region over the next five years. This deal is scheduled to start in the first half of 2023, according to the official ASX announcement.

Following the news, shares of Santos were spotted heading north with a gain of 1.478%. One share of Santos was valued at AU$7.205 as of 2:36 PM AEDT, 14 December. With today’s rise, the share price of Santos marked a 0.49% increase over the last five trading sessions while dropping 3.56% in a month. Additionally, Santos’ shares saw an 8.70% increase in value on a year-to-date (YTD) basis and a 10.03% increase in a year while declining about 11.30% in the previous six months.

A glance at Santos and Walyering deal

As per the company’s office ASX report, this arrangement is made possible by Santos’ already-existing customer contacts and pipeline transport locations, with gas being delivered into Santos’ WA domestic sales gas portfolio. The company is determined to help the Western Australian market by supplying domestic natural gas at a reasonable price.

Talking about the agreement, Kevin Gallagher, CEO and managing director of Santos, said:

Image Source: © 2022 Kalkine Media ®

Data Source: Company announcement dated 14 December 2022

What else has been happening at Santos?

Santos has been running an on-market share buyback programme, under which the company has already bought 70,233,084 shares back till 14 December 2022.

Apart from this, one of Santos' subsidiaries, Santos Ventures Pty Ltd, has extended its exclusivity agreements with Mayur Resources Limited (ASX:MRL) to work together to create a portfolio of nature-based carbon offset projects in Papua New Guinea (PNG).

These carbon offset projects will concentrate on preventing deforestation by preserving 1.4 million hectares of natural rainforest in PNG. As per the ASX filing, Phase 1 development, which could cover up to 800,000 hectares in the Western Province, is already underway.

Additionally, to proceed further with ongoing feasibility and landholder consent work on these carbon projects, Santos has already given Mayur a US$3 million facility in June 2022.