Santos weighs rejoining PNG project-Oil Search CEO Fri Oct 1, 2004 01:52 PM ET NEW YORK, Oct 1 (Reuters) - Australian oil and gas producer Santos Ltd. (STO.AX: Quote, Profile, Research) has expressed an interest in rejoining the $3.5 billion Papua New Guinea to Australia gas pipeline project, the project's biggest shareholder said on Friday. Santos left the project two years ago but is in talks to return, Oil Search Ltd. (OSH.AX: Quote, Profile, Research) Managing Director Peter Botten told reporters in New York at a Merrill Lynch conference.
Papua New Guinea oil and gas producer Oil Search is the biggest stakeholder in the long pending project operated by ExxonMobil Corp., with a 54.14 percent stake.
"We'd be very keen for them to rejoin the project," Botten said. "They have expressed interest in rejoining ... discussions are ongoing."
Santos could use its 31 percent interest in the large Hides gas field in Papua New Guinea to participate in the pipeline project and receive a roughly 11 percent to 12 percent stake in the project through that, Botten said.
Santos Managing Director John Ellice-Flint, also at the Merrill Lynch conference in New York, said he would not speculate on the company's options in that project.
Botten also said he hoped recent pledges of support from state and federal authorities would speed up talks to sign a gas sales deal with Queensland Alumina Ltd. Oil Search last month said it was still waiting for one more customer to sign a conditional gas sales agreement before engineering and design could begin on the pipeline project.
The project has struggled for nearly seven years to sign up enough gas sales to underpin construction of the 2,000-mile (3,200-km) link which would transport gas to northern Australia.
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