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Why Santos Ltd (ASX:STO) shares are up on its PNG LNG PetroChina deal

oil rig, mining, resources

Natural gas producer Santos Ltd (ASX: STO) is one of few S&P/ASX 200 commodity players on the gains list at the time of writing, with its share price up 1.5% to $6.15.

With many commodity stocks in the red today Santos’ surge is likely related to an announcement its PNG LNG project joint venture has signed a mid-term sales agreement with PetroChina for the supply of LNG commencing this month.

Santos has a 13.5% interest in PNG LNG.

Santos also released its quarterly activities report yesterday with highlights including Cooper Basin gas and oil production up 8% and 17% respectively, with overall second quarter production up on the prior quarter, albeit only marginally.reportreport

The Santos board will consider a return to dividends that are “sustainable through the oil price cycle” with details to come when its interim report is handed down next month.

As Santos shares hold their value Woodside Petroleum Limited (ASX: WPL) shares are also up marginally to $34.32, with Oil Search Limited (ASX: OSH) also on the rise by 1.4% to $8.69 at the time of writing.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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