a gsa with santos?, page-6

Soj,

There can be an in principle agreement. It is only once something is signed that it needs to be reported to the market.

Just look at what happened in the Santos/Kogas case. The Koreans were reporting a deal, and yet Santos said to the ASX that they were only in 'advanced discussions'. Discussions, my foot! The only think they were 'discussing' was which temple to photograph Knox and the Kogas Chairman shaking hands! The day after that statement to the ASX, Santos went into a trading halt.

But Santos didn't make the announcement to the ASX until the day the deal was formally signed. It would have been 'agreed' in principle months earlier (with all parties - Petronas, Total etc.), and then the lawyers go through the long process of codify the agreement.


Given that the signing of a GSA could kick off action on ESG, it doesn't surprise me that Santos have chosen to wait until after the HGO top-up expires. Otherwise, why haven't Santos already made an FID, given that they have now committed to doing so by virtue of the deals with Kogas and Total? There is no reason for them to have delayed their FID until 'late January'. All their other ducks, (except for acquiring extra gas), are already lined up.

Such a deal would solve two companies' challenges. ESG gets to underwrite further expansion based on a company-making commercial deal. And Santos gets the gas they lack, allowing for the pipeline to the Wallumbilla hub to begin and for them to make an FID on GLNG.

WIN-WIN.

The only losers will be the other LNG projects, like Shell/PetroChina, who are also short of gas.

Yaq