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It is also useful to take a look at presentation on STO website "Santos Investment Presentation" Dec 10 2009. Given its date of release close to Christmas it may have been missed by many on the ESG thread.

Santos are clearly making a major company change which involves a complete refocus of the company towards gas and LNG.

The presentation is over a 100 pages. So some highlights by page number.

p94 shows STO's plans - commitment to LNG into the future

p98: Capex in 2010- 1 Billion for GLNG (Gladstone). 500 million for PNG LNG project. 500 million for already sanctioned projects (oil and conv gas) 150 million for exploration. The FID for GLNG will be mid 2010.

P96 to 97 STO are not ruling out selling down some assets (oil and conv gas in my opinion) to assist with Capex load. Also mention a 9% share of the GLNG project is on the table.

P81 to 82 is titled Gunnedah basin - next major play in CSG. They say they have the "Basin master position" when you take into account the STO tenements and the STO share of the ESG tenement.

On P22 The chart shows pipelines and Santos tenements in Eastern Australia. Gunnadah was labeled as "potential hub". My take on this is a pipeline hub for gas distribution.

On the GLNG project:
p63 indicates there will be 2 trains in the intial phase. Both trains can consume 600 TJ/day of gas. There is space for more trains on site.

p65 STO is rampling up gas production at Fairview, since Jan 2009 have drilled 71 production wells. Gas production has increased from 90 to 125 TJ/day.

Ramp gas will be stored in Roma. I presume they will do this by storing the gas underground in an empty gas field. In my opinion it will mean that STO have a very flexible gas supply chain and can develop the CSG fields to full output while finalising the GLNG facility.

P72 Suggests the plan is to use the ramp gas and production gas from the CSG fields to provide gas for GLNG train 1 in 2014 and soon after train 2 in 2015.

IMO I think the Gunnedah basin CSG will be required by Santos for gas supplies for future trains. STO and BPT are exploring - evaluating tight (shale) gas in the cooper basin as well.

Makes very interesting reading, and food for thought how ESG and the Gunnedah basin fits into STO plans. STO FID on GLNG in mid 2010 is going to be a major milestone for the 2010 calander


Enjoy and DYOR