Why is the Santos share price marching higher on Tuesday?

Santos share price worker in front of oil mine puts thumbs upSantos share price worker in front of oil mine puts thumbs up

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 the 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.

The post Why is the Santos share price marching higher on Tuesday? appeared first on The Motley Fool Australia.

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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.

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