Santos Limited (ASX: STO) has accelerated the final repayment of its PNG LNG project finance facility. The Company announced on 17 December 2025 that the debt facility is now fully repaid. This strategic move comes six months ahead of the scheduled June 2026 maturity date.
Figure 1: Santos corporate signage at the Company’s headquarters.
The Santos PNG LNG repayment marks a significant milestone for the energy giant. Santos’ share of the final scheduled payment totalled USD 363 million, which was paid in December 2025. The PNG LNG Joint Venture, in which Santos holds a 39.9 per cent interest, has now closed the facility completely.
Santos PNG LNG Project Finance Facility Retired Ahead of Schedule
The Santos PNG LNG repayment eliminates future interest costs associated with the Santos PNG LNG project finance facility. It also removes restricted cash requirements from the balance sheet. Santos now maintains a strong liquidity position of approximately USD 4.0 billion through cash and undrawn committed facilities.
The weighted average debt maturity for Santos now stands at approximately five years. The Company has zero scheduled debt maturities in 2026. The next scheduled debt obligation falls due in September 2027.
What Does The Santos PNG LNG Repayment Mean For Investors?
The Santos PNG LNG repayment provides enhanced balance sheet flexibility. This timing proves strategic as Santos approaches production from two major development projects. Barossa LNG and Pikka Phase 1 are both expected to generate new cash flows in the near term.
Managing Director and Chief Executive Officer Kevin Gallagher views the early repayment as a historic milestone. He noted that the move strengthens Santos’ balance sheet as major development projects enter production. This positions the Company to deliver sustainable long-term value for shareholders.
The PNG LNG project has delivered strong and sustained performance since operations commenced in 2014. High-quality, long-term project finance made the development of this nation-building project possible for Papua New Guinea.
Industry Outlook: Project Finance Remains Critical for LNG Development
The successful closure of the Santos PNG LNG project finance facility demonstrates the viability of project financing for large-scale LNG developments. As Santos advances towards a final investment decision for Papua LNG, the Company expects a significant portion of associated costs to be funded through project finance.
This financing approach leverages the proven performance of both the PNG LNG project and the project financing facility. Export credit agencies and commercial banks are expected to support future development. The model established through PNG LNG creates a blueprint for subsequent projects in the region.
Santos Production and Financial Performance Context
Santos reported free cash flow from operations of approximately USD 300 million in the third quarter of 2025. Year-to-date free cash flow from operations reached approximately USD 1.4 billion for the period ending 30 September 2025.
Production totalled 21.3 million barrels of oil equivalent (mmboe) in the third quarter. Total year-to-date production reached 65.4 mmboe. Sales volumes hit 21.5 mmboe in the third quarter, with year-to-date sales one per cent higher than the prior year.
Sales revenue reached USD 1.1 billion in the third quarter. Cumulative revenue totalled USD 3.7 billion year-to-date. Gearing stood at 22.9 per cent at the end of September 2025, excluding operating leases.
Papua LNG Project Advances Towards Final Investment Decision
TotalEnergies, the operator of the Papua LNG Project, continues to advance all workstreams in support of progress toward a final investment decision (FID). Joint venture partners include Santos, ExxonMobil and Eneos Xplora. Re-bid tender evaluations are currently in progress.
The Conservation and Environment Protection Authority (CEPA) granted the Level 3 Environmental Permit for the upstream component of the project. Kevin Gallagher confirmed that Santos expects a significant portion of associated costs for Papua LNG to be funded through project finance.
This approach mirrors the successful PNG LNG project finance model. The proven performance of PNG LNG and its financing facility provides a strong precedent. Export credit agencies and commercial banks are expected to support the Papua LNG development.
Santos Share Price Performance
Santos shares currently trade at AUD 6.065 per share on the Australian Securities Exchange. The Company’s market capitalisation stands at AUD 19.84 billion. Over the past 52 weeks, Santos shares have traded in a range of AUD 5.200 to AUD 8.060 per share. The Company also maintains listings on the Port Moresby Stock Exchange (PNGX: STO) and through American Depositary Receipts (ADR: SSLZY).
Santos’ strong operational performance and strategic debt management support investor confidence in the Company’s trajectory. The early Santos debt repayment demonstrates financial discipline and positions the Company favourably for the production ramp-up period ahead.
FAQ
Q1: When did Santos complete the PNG LNG project finance facility repayment?
Santos completed the final repayment of the PNG LNG project finance facility in December 2025, six months ahead of the scheduled June 2026 maturity date.
Q2: What was Santos’ share of the final PNG LNG project finance repayment?
Santos’ share of the final scheduled repayment totalled USD 363 million, which was paid in December 2025.
Q3: What is Santos’ current liquidity position after the PNG LNG repayment?
Santos maintains a strong liquidity position of approximately USD 4.0 billion through cash and undrawn committed facilities following the repayment.
Q4: When are Santos’ next scheduled debt maturities?
Santos has zero scheduled debt maturities in 2026. The next scheduled debt maturity falls due in September 2027.
