This article posted on upstreamonline.com may also be of...

This article posted on upstreamonline.com may also be of interest.

Duo chase Gladstone LNG deals

By Upstream staff


Santos and Petronas in talks with potential customers in Japan, China and a third Asian nation for output from the proposed Gladstone liquefied natural gas plant, with Santos saying today they hope to seal initial accords this year.


The venture, owned 40% by Malaysia’s Petronas, needs to at least conclude heads of agreements with customers on LNG sales pacts before it can give the go-ahead for the A$7.7 billion (US$4.9 billion) investment, Santos boss David Knox said.

The partners are due to approve the Gladstone LNG project for development in the first half of 2010 and aim to start shipments in 2014 to meet rising Asian demand.

“We’re very much engaged in discussing Gladstone LNG in three Asian countries with very serious buyers,” Knox said on a conference call on the company’s full-year earnings. The venture’s gas “has been very well received in the market”, he said.

The Gladstone LNG project is one of five proposed ventures in the Gladstone region on Queensland’s central coast seeking to convert gas extracted from coalbed methane.

LNG buyers, in their discussions with the venture, are “looking beyond the current financial crisis” and are seeking long-term security of supply,” Knox said. Some of the potential customers are companies that last year considered investing in the project, and so understand Queensland's CBM play, he said.

The venture’s marketing is being led by Petronas.