Santos's stake in the recent Zola gas discovery in Western Australia could well prove the Adelaide company's ticket into a fifth liquefied natural gas project.
While it is still early days, talk out of the recent APPEA conference has identified the Chevron-led Wheatstone LNG project as the most likely home for Zola's 2 trillion cubic feet of gas.
A similarly sized resource gave Apache Energy and Kuwait's Kufpec a 25 per cent interest in Wheatstone, suggesting the Zola partners could command a similar stake.
That would translate into a 6.2 per cent direct equity interest for Santos, alongside its stakes in the Gladstone LNG project, PNG LNG, Darwin LNG and Bonaparte Floating LNG.
While not the main game for Santos - Citigroup estimates it is worth about 81c per share to the company - the stake would add further diversity and heft to what is a rapidly growing LNG portfolio.
TAP Price at posting:
$1.04 Sentiment: Buy Disclosure: Held
