Santos has entered into a binding agreement to acquire a 30 per cent interest in the Meridian CSG project for ~US$85-$90 million as part of a sale to the GLNG joint venture partners and has completed the sale of its interest in the Mahalo joint venture, valued at ~US$23-44 million.
GLNG acquires Meridian CSG project in Queensland
The GLNG joint venture partners – Santos, TotalEnergies, PETRONAS and KOGAS – have entered into binding agreements to acquire 100 per cent of the Greater Meridian CSG project (Meridian) in Queensland, which was underpinned by a long-term supply contract with GLNG. Each GLNG partner will acquire a pro-rata share in line with its GLNG joint venture interest, with Santos acquiring a 30 per cent interest and becoming operator of the project upon completion of the transaction.
Highlights
- Converts a long-standing contracted supply relationship into GLNG equity production, consistent with Santos’ strategy to backfill and sustain GLNG with owned production
- Increases proforma Santos 2P reserves by 17 mmboe as at 31 December 2025, and proforma annual production by ~1 mmboe
- Santos net acquisition cost is ~US$85–90 million after the estimated adjustments for cash flows from the 1 January 2026 effective date to the completion date
- Conditional on regulatory approvals including competition approvals and FIRB clearances
- Completion targeted for late 2026
The acquisition is consistent with Santos’ strategy of disciplined growth around existing infrastructure, with synergies expected as operations are integrated with Santos’ other CSG operations in Queensland. Meridian will become a fifth production hub for GLNG.
Meridian is a producing asset, the development of which was underpinned by the existing long-term supply contract with GLNG that commenced in 2015. Meridian also supports a domestic gas contract with local manufacturer Queensland Nitrates at Moura.
The asset has further production growth potential. GLNG ownership of the asset is a natural step towards unlocking undeveloped resources.
'The Meridian acquisition meets our disciplined capital allocation criteria, exceeds our internal hurdle rates, and is value accretive for Santos,' Santos Managing Director and Chief Executive Officer Kevin Gallagher said.
Transaction overview
Santos and each of the GLNG joint venture partners have entered into binding Sale and Purchase Agreements with Westside Corporation and Mitsui E&P Australia for the Meridian CSG project in Queensland.
The gross purchase price is A$430 million (~US$310 million) with an effective date of 1 January 2026. Taking into account positive cash flows from the effective date to completion, as well as transaction costs, Santos’ net acquisition cost is forecast to be ~US$85–90 million.
Santos CSG Pty Ltd will enter a new joint operating agreement with its GLNG joint venture partners, TotalEnergies, PETRONAS and KOGAS, effective from completion. Westside will provide transitional support for up to six months post completion.
Completion of the transaction is conditional on regulatory approvals, including competition approvals, FIRB approvals and Queensland departmental consents as well as other customary consents from counterparties. Completion is being targeted for late 2026.
Asset overview
Meridian is a producing CSG project near Moura in Queensland, comprising 280 producing wells with gas export capacity via the GLNG Gas Transmission Pipeline and Jemena’s Queensland Gas Pipeline. Current production is 47 TJ/d, with approximately 90 per cent supplying GLNG under a long-term gas sales agreement and the remainder supplying domestic gas customer Queensland Nitrates at Moura.
The Greater Meridian CSG project has been evaluated as comprising 322 PJ gross 2P reserves and 346 PJ gross 2C resources as at 31 December 2025. Upon completion Santos expects to book 17 mmboe net 2P reserves and 18 mmboe net 2C contingent resources, minus volumes produced from 1 January 2026 to the completion date. The 2P reserves are predominantly contained within the PL94 license area and comprise developed and undeveloped well locations. The 2C resources include volumes associated with the development opportunity north of the existing producing area (Mungis CSG project).
The acquisition is underpinned by the producing base asset. The potential Mungis CSG project development will be assessed as a future standalone investment decision.
Completion of sale of Santos’ interest in the Mahalo joint venture
Santos also announced it has now completed the divestment of its 42.86 per cent operated interest in the Mahalo joint venture in Queensland’s Bowen Basin to Comet Ridge Mahalo Pty Ltd (Comet Ridge).
Santos has received total initial proceeds of ~A$32 million (US$23 million), comprised of A$2 million deposit, A$22.42 million in cash consideration at completion, plus approximately 83.78 million ordinary fully-paid Comet Ridge shares, currently valued at ~A$7.5 million. Disposal of the shares is subject only to a good faith consultation obligation and use of reasonable endeavours to facilitate any disposal in a manner that maintains an orderly market. In addition, A$30 million in contingent cash payments are payable upon gross production milestones of the Mahalo project, subject to its development, taking total consideration to up to ~A$62 million (US$44 million).
Santos Managing Director and Chief Executive Officer Kevin Gallagher said transactions like this demonstrate Santos’ capital discipline, optimising the portfolio to monetise pre-development assets that are not near-term priorities in our capital allocation framework.
Source: Santos
