santos in woodside crosshairs

IN SMH TODAY
Woodside is rumoured to be contemplating a $15 billion bid for Santos to grab its gas export interests, most notably its exposure to the budding Queensland gas export industry.

A bid for Santos would deliver Woodside exposure to the Queensland gas projects based on coal seam gas resources, as well as Santos's interests in the Darwin liquefied natural gas project, and the $US15 billion Papua New Guinea LNG project.

Any move on Santos would be an about-face for Woodside. Its managing director, Don Voelte, is not a recognised fan of the coal seam gas projects.

The Santos share price has risen strongly in the past three weeks on the strength of rumours that Woodside has been sounding out industry personnel about their willingness to join a team for a major venture, now said to be a move on Santos.

Analysts described the Santos rumours as chatter and pointed out that Woodside has its own LNG growth plans to pursue without having to bother with the unknowns of LNG exports from coal seam gas resources. The chatter nevertheless persists.

The theory is that Woodside would sell Santos's non-export gas interests to defray the cost of the acquisition. A bid for Santos has been on the cards since the South Australian government lifted the 15 per cent shareholding restrictions in the company - a throwback to when Alan Bond was stalking the Adelaide company.

The Santos rumour comes as BG Group has jumped to the lead in the race to become the first of the Queensland gas exporters after formally signing a deal for the supply of $50 billion of gas to China.