Kogas to buy into Santos CSG-LNG project

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Oct. 18 -- South Korea’s Korea Gas Corp. has confirmed it is in negotiations with Santos Ltd., Adelaide, to acquire a 15% interest in Santos’ proposed Gladstone coal seam gas-LNG plant in Queensland.

The talks are also reported to include an offtake agreement for 2 million tonnes/year of LNG.

If concluded successfully the deal will enable Santos to reduce its expected equity raising for the project by $1 billion (Aus.).

Santos has been widely tipped to have to go to the markets for help to fund its estimated share of as much as $6 billion (Aus.) for the first LNG train in Gladstone.

Last month the company sold a 15% stake to France’s Total SA while its joint venture partner Petronas of Malaysia sold a 5% stake to total.

Santos is still scheduling a yearend date for final investment decision on the project. It expects to begin production from the first 3.6 million tpy train in 2014. Coal seam gas will be sourced from Santos’ fields in the Surat-Bowen basins of southeast Queensland.

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