Ann: Santos signs mid-term LNG supply contract, page-2

Anyone remember STO ever doing contract on " delivered ex-ship basis" before?

IMO this means STO is responsible for all export docs and ship , shipping transport and only fulfills contract when gas arrives at port specified . It interestingly doesn't tell us which port

This is a huge change in risk if gas is being shipped from Australia as govt has , is doing all the groundwork to ensure local supply is guaranteed regardless of overseas commitments and also at a capped local price. If a competitors project fails to deliver Gss in Australia STO in theory ( unless some sort of aussie govt pre approval) STO may have to proved gas into East West coast local supply before being allowed to export etc.
STO takes on all shipping risk and insurance of cargo to port

For this sort of contract to be executed it appears to me that Aussie government has become so unreliable that buyers of gas / energy are de-risking and forcing aussie gas sellers to take all risks and deliver to port.

Upside - extra margins if all goes well in regards to gas supply, loading, ports, ships available, insurance short delivery distance . STO with extra capacity in PNG could use shorter shipping distance if extra PNG terminal capacity is available if Aussie govt are being idiots.

Downsides - European pipelines , ports and gas supply infrastructure are obvious targets in an increasingly unstable world
Yemen and pirates will change shipping routes and thus shipping times in that region so ship availability will tighten and $ cost will increase due to longer turn around times and risk.

Downsides- Those shipping terms also means STO is responsible for all taxes and duties etc. If aussie govt introduces some knee jerk tax / fee then STO carries burden .

Ship availability - there is not enough being built or in service - Hope STO has other side ship locked in and a deal with Aussie or PNG govt


Maybe this is what Aussie based gas exporters now have to provide to get sales from a unreliable country exporting energy?


Odd to use a old term for a Singapore based company and I know they are valid as you can contract how you want.
Discontinued in 2011, DES was replaced by two new Incoterms, delivered at terminal (DAT) and delivered at place (DAP). See table below





ASX / Media Release2 October 2024Santos signs mid-term LNG supply contractSantos today announced the signing of a mid-term LNG supply contract with TotalEnergies Gas & PowerAsia Private Limited (TotalEnergies).The contract is to supply 20 LNG cargoes, or up to approximately 0.5 million tonnes of LNG per annumover a period of 3 years plus one quarter. The contract will commence in Q4 2025 with LNG beingsupplied from Santos’ global portfolio of world-class LNG assets on a delivered ex-ship basis.Santos Managing Director and Chief Executive Officer Kevin Gallagher said the contract withTotalEnergies is a new LNG relationship for Santos and builds on our existing joint venture partnerships.“This oil indexed contract, along with the recently executed long-term LNG Sales and PurchaseAgreement with Hokkaido Gas in Japan, and the mid-term contract with Glencore, demonstrates Santos’strong LNG portfolio position and customer relationships in the region. Our portfolio is nicely balancedover the short to medium term with around eighty percent of volumes indexed to oil price and aroundtwenty percent exposed to spot pricing.”“There continues to be extremely strong demand in Asia for high heating value LNG from projects suchas Barossa and PNG LNG as countries focus on reducing their carbon emissions. Santos is committedto supporting the energy security of our valued customers across Asia, where gas will play an essentialrole in decarbonisation efforts across the region,” Mr Gallagher said.Ends.This ASX announcement was approved and authorised for release by Kevin Gallagher, Managing Director and Chief Executive Officer


https://export.business.gov.au/freight-and-shipping/know-your-incoterms