The Santos Ltd (ASX: STO) share price finished in the green today amid news the company has signed a new gas agreement.
The company's shares were trading at $7.09 at market close, a 3.2% gain.
Let's take a look at what the company announced today.
Milestone gas agreement
Santos revealed it has signed a gas agreement on the P'nyang Project located in the Western Province of Papua New Guinea.
The agreement is between the Papua New Guinea Government and all companies with a stake in the ExxonMobil-operated project. This includes Santos and affiliates of ExxonMobil and JX Nippon.
Santos stated it has a 38.5% interest in the P'nyang project. As my Foolish colleague Brooke reported last month, Santos increased its stake in the project via its merger with Oil Search.
Santos said the gas agreement is a "major milestone" that sets out the fiscal framework and project scoping and evaluation.
Commenting on the project, Santos said:
Subject to a final investment decision by the P'nyang participants, the ExxonMobil-operated P'nyang project would deliver LNG through new upstream facilities in Western Province linked to existing infrastructure, including our world-class PNG LNG plant near Port Moresby
Five per cent of gas produced at the project would be made available to support the government's electrification goals in Western Province or another location.
Management commentary
Speaking further on the announcement, Santos chief executive officer Kevin Gallagher said:
The signing of the P'nyang project gas agreement demonstrates the commitment of all parties to the project and will bring economic benefits for the people of PNG when the project is developed.
I thank the PNG Government and the government of Western Province for their partnership with the P'nyang participants to move towards P'nyang project development, which is proposed to commence following delivery of the Papua LNG project.
Santos share price snapshot
The Santas share price has climbed 5% in the past year and is up 12% year to date. In the past week alone, Santos shares have fallen 8% but they have gained 0.28% in a month.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 6% over the past year.
Santos has a market capitalisation of about $24 billion, based on today's share price
