Curtis Island GLNG deal?

SANTOS has denied it is on the verge of inking a multi-million deal for the Gladstone Liquified Natural Gas (GLNG) project on Curtis Island, despite media speculation yesterday.

The speculation resulted in Santos stock market shares jumping over seven per cent yesterday.

Reports suggested Santos was on the verge of making the deal with Royal Dutch Shell, Sinopec and Korea Gas.

The deal would result in the international energy giant, Shell, picking up a 30 to 35 per cent stake in the Gladstone coal seam gas-to-liquified natural gas project, worth an estimated $2 billion.

In a statement issued by Santos, the company noted speculation in yesterday’s media regarding the GLNG project.

“GLNG remains in detailed ongoing discussions with a number of parties in relation to potential LNG sales, equity in the project and collaboration between projects.

“These discussions are incomplete and there is no certainty that definitive agreements will be executed by the parties.

“The company will update the market as appropriate.”

Reports also indicated Sinopec and Kogas would agree to long-term contracts to purchase LNG worth tens of billions of dollars from the project.

The project proposes to conduct exploration and production of coal seam gas in the Surat and Bowen Basins, a 435km gas pipeline from the gas fields to Gladstone, and a gas liquefaction and export facility on Curtis Island.

GLNG was expected to create 5000 jobs during construction and sustain more than 1000 jobs during operation.

The project will initially produce 7.2 million tonnes per annum (mtpa) of LNG, with a maximum potential production of 10 mtpa.

On May 28, GLNG became Australia’s first major coal seam gas to LNG project to receive its environmental approval from the Queensland coordinator-general.

Santos chief executive David Knox had told The Observer in June that Santos had been looking to sign up a buyer for the GLNG project to underpin a second LNG train and alleviate the need for further capital raising.

Santos has a 60 per cent stake in the Gladstone project, with Malaysian energy giant Petronas having purchased 40 per cent in 2008.

Petronas has already agreed to buy up to three million tonnes per year of LNG from Gladstone.

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