Santos buys gas reserves for Queensland LNG plant

The WestSide Corp.-Mitsui joint venture has been let a contract to supply gas to the Santos Ltd.-led Gladstone LNG project for 20 years beginning in 2015.

The agreement is for the JV to supply as much as 65 terajoules/day of gas from its Meridian gas fields near Moura in the Bowen basin of central-eastern Queensland.

Gas price will become oil-linked in 2016.

The Gladstone LNG pipeline route is adjacent to the Meridian fields and the deal is in line with Santos’s hunt for additional third-party gas to feed its CSG-LNG project on Curtis Island near Gladstone.

Meridian fields have installed compression capacity of 30 terajoules/day. Gladstone LNG requires an average flow rate of 1,200 terajoules/day to supply the two LNG trains and meet the foundation offtake agreement commitments. The project is aiming for 7.8 million tonnes/year of LNG production; owners are Santos 30%, Petronas 27.5%, Total 27.5%, and Kogas 15%.

The WestSide-Mitsui agreement builds on Gladstone LNG’s existing diverse gas supply portfolio that includes gas from its own acreage, underground storage, supply from Santos’s portfolio of assets in the region, and other third parties.

WestSide has a 51% stake in the JV, while Mitsui holds the remainder.

Gladstone LNG is on schedule for first shipment of LNG in 2015. Construction is nearing 80% completion.

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