Why is the Santos share price marching higher on Tuesday?

The Santos share price looks to be getting a boost on two fronts on Tuesday.

| More on:
Santos share price worker in front of oil mine puts thumbs up

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Santos share price is up 2% in afternoon trade
  • The ASX 200 oil and gas company reported further progress at its Papua LNG joint venture project
  • Santos also looks to be receiving some tailwinds after prime minister Anthony Albanese voiced support for gas energy

The Santos Ltd (ASX: STO) share price is up 2.0% in early afternoon trade, while the S&P/ASX 200 Index (ASX: XJO) remains in the red. 

Shares in the ASX 200 oil and gas company closed yesterday at $7.14. Shares are currently trading for $7.29 apiece.

Here's what investors are considering today.

What's piquing ASX 200 investor interest?

The Santos share price looks to be getting a boost on two fronts.

First, the ASX 200 energy stock reported front-end engineering and design (FEED) work has commenced at its Papua LNG joint venture project, located in Papua New Guinea.

Santos holds a 22.8% interest in Papua LNG along with TotalEnergies (40.1% and operator) and ExxonMobil (37.1%).

The JV partners opted for a model using four electric LNG trains. The four trains have a combined capacity of four million tonnes per year and will be developed within the existing PNG LNG project site.

Santos reported that Papua LNG has also secured access to up to two million tonnes of existing liquefaction capacity from PNG LNG.

Commenting on the progress that could be helping boost the Santos share price today, CEO Kevin Gallagher said:

The concept selected for Papua LNG maximises value through midstream integration with PNG LNG to deliver increased capital efficiency and lower operating costs, consistent with our disciplined operating model.

FEED entry for Papua LNG is a significant step for the project.

Papua LNG is forecast to have a liquefaction capacity of up to six million tonnes of LNG per year. Santos expects first production by or shortly before early 2028.

Other tailwinds for the Santos share price

Also potentially helping lift the Santos share price today is some strong support for gas-powered energy announced by prime minister Anthony Albanese.

Speaking at the Australian Financial Review Business Summit, Albanese stressed the importance of gas in the ongoing global transition to cleaner energy.

"This is where gas in particular has a key role to play, as a flexible source of energy – providing peaking power today and continuing to provide firming and back-up power," he said. "Helping to smooth the transition to renewables, while guaranteeing energy security both for Australia and for our partners in the region."

Albanese added that it's important that energy companies and their investors "can look to government for the confidence and certainty of a stable foundation and a long-term vision".

Santos share price snapshot

As you can see in the chart below, the Santos share price is back in the green for 2023, up 2.1% since the closing bell on 30 December.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »