It will be interesting once Santos reveals who has bought into...

It will be interesting once Santos reveals who has bought into its GLNG project.

The two names that keep popping up are Kogas and Sinopec.

I expect we will get news within six weeks.


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Reuters

SEOUL/PERTH - State-run Korea Gas Corp (KOGAS) is in the final stage of talks with Santos to become a gas buyer and investor in a $US15 billion ($A16.9 billion) liquefied natural gas project, three sources say.

KOGAS is planning to invest around 10 per cent equity in the Santos' flagship Gladstone LNG project and the volume of LNG purchase would be more than two million tonnes per year, two sources said. They declined to be named as the deal was not completed and they were not authorised to speak publicly about the project.

"The deal is likely to be announced in the second week of September and KOGAS is awaiting government approval," one of the sources said.

A Santos spokesman declined to comment.

Santos shares rose after the report and were up 1.5 per cent at 1121 AEST, outperforming the broader market's 0.2 per cent fall.

If approved, KOGAS would invest over $US1 billion in the coal-seam gas export project, one of the first such projects in the world, as it ramps up investments in upstream oil and gas projects in a bid to secure energy supplies.

An investment by KOGAS would greatly reduce Santos' funding burden, lower the chance of a further equity raising and raises the likelihood that the Gladstone project will be given final project approval by the end of the year.

The deal would also follow a string of Australian LNG sales as a number of projects on the east and west coasts jostle to secure buyers to underpin final investment decisions.

KOGAS, the world's largest LNG buyer, sold 24.6 million tonnes of LNG in 2009 and said in February it was planning to spend about one trillion won ($A942.89 million) this year on overseas resource development.

Santos on Thursday said it was in advanced talks with a number of Asian buyers for binding sales contracts for gas from Gladstone and has raised the amount of equity it was prepared to sell to 15 per cent from nine per cent.

Santos has up to 5.2 million tonnes of LNG a year left to sell from its two-train project Gladstone, after a $A40 billion deal last year to sell a minimum of two million tonnes of LNG a year to its Malaysian venture partner Petronas.

It plans to make an investment decision on the first planned production train at Gladstone by year-end, while an approval for the second production train would come about a year later.