Australian LNG operator Santos entered into a strategic relationship with existing Chinese shareholders ENN Group and Hony Capital.
Gas distributor ENN and Hony, a private equity firm, have an aggregate interest of 15.1% of Santos shares.
Based on mutual cooperation and assistance, the new deal will see the joint investment in gas exploration and liquefied natural gas (LNG) production in Australia and Papua New Guinea, Santos said in a statement on Tuesday.
“ENN and Hony will support future investment by Santos and Santos will use reasonable endeavours to include ENN and Hony in investment opportunities where it is in the best interests of Santos shareholders as a whole,” the company said.
The relationship will become effective and remain in effect for so long as ENN and Hony have a relevant interest in 15% or more of Santos shares.
“Santos welcomes the formalisation of a strategic relationship with Hony and ENN. Hony became a major shareholder in 2015 and together with ENN has continued to support Santos through challenging times. We look forward to a closer relationship with Hony and ENN and their support for the continued growth of Santos for the benefit of all shareholders,” said Santos Chairman Peter Coates.
Chairman Wang, founder of ENN said: “ENN and Hony strongly support the new growth strategy of Santos under the leadership of CEO Kevin Gallagher and the Santos Board. The strategic relationship will effectively link up the upstream E&P competence of Santos with China’s fast growing downstream market of natural gas, and explore many opportunities for Santos to realise its full potential as a leading producer of gas and LNG.”
As part of the relationship, Eugene Shi will join the Santos Board as a non-executive director. Shi is Vice President ENN Ecological Holdings Ltd and has more than 20 years experience across capital markets, M&A, strategy and business development.