Santos Limited

Santos operates as a classic source-sink organism, extracting concentrated energy reserves from geological deposits and distributing them across Asia-Pacific consumption networks. Founded in 1954 in South Australia's Cooper Basin, the company now controls LNG assets spanning three countries: Gladstone LNG (Queensland, 7.8 million tonnes per annum capacity), PNG LNG (Papua New Guinea, 6.9 Mtpa), and Darwin LNG (Northern Territory). This archipelago of extraction sites feeds demand sinks in Japan, South Korea, China, and Singapore.

The source-sink dynamics reveal path-dependent infrastructure constraints. Santos committed $18.5 billion to Gladstone LNG (2010-2015) building coal-seam gas wells, 530km pipelines, and liquefaction facilities on Curtis Island. Once constructed, these assets create powerful lock-in: the company must maintain production to service debt and justify capital deployed, even when LNG spot prices collapse below breakeven. Unlike oil tankers that can redirect mid-voyage, pipeline networks and LNG trains are geographically fixed. The organism can't migrate when conditions deteriorate.

Recent ecological shifts threaten established flow patterns. Asian buyers are diversifying suppliers - Japan's dependence on Australian LNG dropped from 82% (2015) to 64% (2024) as U.S., Qatar, and Russian supplies increased. Santos acquired a 25% stake in the Pikka oil project in Alaska (2021) and bought ConocoPhillips' northern Australia assets (2024) for $1.4 billion, attempting to diversify beyond Australian gas concentration. But this creates metabolic inefficiency: operating assets across Australia, PNG, Alaska, and Timor-Leste dissipates technical expertise and increases coordination costs. The company faces the trade-off familiar to all source-sink organisms - concentrate resources for efficiency, or diversify for resilience. Santos is betting that geographic diversification outweighs the metabolic overhead of scattered operations.