Santos will supply up to about 400,000 tonnes of liquefied natural gas every year for a decade starting 2027 to Japanese energy firm Hokkaido Gas, Australia's second biggest independent oil and gas producer said on Tuesday.
The firms will work on e-methane and carbon sequestration opportunities as global oil and gas companies move towards cleaner forms of energy.
The supply deal comes at a time when the industry executives of the natural gas sector in Australia have been calling for more measures to bring back an investment environment which has been damaged by a slew of state interventions in a bid to curb rising energy prices and boost domestic supply.
The deal demonstrates strong demand for high heating value LNG from Santos' major projects such as Barossa and PNG LNG.
Australia's government in May put out a strategy to boost natural gas development despite the country's commitment to net zero carbon emissions by 2050, indicating soaring demand from Asian partners.
(Reuters - Reporting by Roshan Thomas in Bengaluru; Editing by Nivedita Bhattacharjee)