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Santos to Raise Stake in Papua LNG Project as Positive Steps Taken towards Final Investment Decision, RBC Capital Markets Says

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Santos (ASX:STO) is set to increase its stake in the Papua LNG project, which has taken positive material steps towards realising its goal to achieve a project final investment decision by the end of 2026, RBC Capital Markets said in a note on Wednesday.

Santos plans to acquire an additional 3.3% equity in the project for around $189 million. TotalEnergies agreed to sell a 9.1% interest, post Kumul back-in, to the existing joint venture partners on a pro rata basis, providing ExxonMobil with a 34.1% leading project interest to align with its operatorship role, and provide Santos with a 21% project equity interest.

Project capital expenditure was reduced by around $4 billion to around $14 billion, following successful design changes and contractor rebidding.

Santos is building Papua New Guinea's first offshore floating storage and offloading unit as a replacement for the aging Kumul Marine Terminal.

The investment firm has an outperform rating on Santos with a price target of AU$8.50 per share.

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