I don't think we'll be waiting 18 months to find out what is going to happen to esg.
I think we will know by June... around the same time Santos will make its FID on LNG out of Gladstone and as sure as night follows day it will happen.
This report in The Australian today.
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Santos boss stakes LNG claim in Gladstone Matt Chambers From: The Australian February 19, 2010
SANTOS chief executive David Knox has pushed himself to the front of the line when it comes to Gladstone's liquefied natural gas ambitions, declaring he wants his company to operate an LNG complex there bigger than the North West Shelf project in Western Australia.
Speaking yesterday after Santos delivered a 53 per cent fall in underlying net profit for 2009, Mr Knox said his ultimate goal at Gladstone was to build a 20 million-tonnes-a-year liquefied natural gas hub that could draw gas from Queensland, South Australia and NSW.
"That would be the ultimate vision, that we'd have a North West Shelf-scale project on Curtis Island, operated by GLNG," Mr Knox said.
He said GLNG -- the Santos-Petronas joint venture hoping to start construction on its first LNG production train this year -- had enough gas to underpin two trains, but that its land at Gladstone could hold three more and had the capacity to produce 20 million tonnes a year.
Mr Knox said options for supplying the remaining gas included other parties' coal seam gas in Queensland, tight or shale gas from the Cooper Basin in South Australia, or CSG from the Gunnedah Basin in NSW. "It's not an unrealistic view to hold," he said.
The timeframe for such an ambitious program could stretch out 20 years or more, Mr Knox said, as it had for full development of the North West Shelf, Australia's biggest resource project, which now produces about 18 million tonnes a year of LNG.
Santos announced yesterday that 2009 net profit fell to $434m, from $1.65 billion in 2008, when profit was boosted by the $1.2bn sale of 40 per cent of the Gladstone LNG project to Petronas.
Underlying 2009 profit fell from $548m to $257m, the lowest in a decade, as lower oil and gas prices pushed revenue down $600m to $2.18bn.
Mr Knox said increased operating costs over the decade and a greater proportion of domestic gas sales at the expense of more valuable oil were the main reasons the underlying profit was lower.
The result was roughly in line with market expectations, but Santos shares slipped 14c to $13.47.
Mr Knox said Santos planned to commit to about $3bn of long-lead items for Gladstone in the coming month.
The contracts would have a 10 per cent cancellation fee if the project did not reach a final investment decision stage.
Santos is in talks with two potential customers on the sale of LNG and a 9 per cent stake in the GLNG project.
Mr Knox said any partner would take an interest from the gasfields all the way to Tokyo Bay, but denied this meant the potential buyers were Japanese.
Santos declared a final dividend of 20c a share for a total 2009 dividend of 42c, both of which were unchanged from 2008.
Earnings before interest, tax, depreciation and amortisation fell to $1.55bn, from $3.47bn in 2008.
ESG Price at posting:
78.5¢ Sentiment: Buy Disclosure: Held
