Sales pact firms outlook for Gladstone LNG

Santos Ltd. has signed a heads of agreement with its Gladstone LNG project partner Petronas of Malaysia to sell 2 million tonnes/year of LNG from the project to Petronas with an option of an additional 1 million tonnes/year.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, June 18 -- Santos Ltd. has signed a heads of agreement with its Gladstone LNG project partner Petronas of Malaysia to sell 2 million tonnes/year of LNG from the project to Petronas with an option of an additional 1 million tonnes/year.

The agreement is binding and conditional only on the GLNG project’s receiving final approval to proceed.

Petronas will take first deliveries of LNG in 2014 under the 20-year contract.

The GLNG project involves piping coalbed methane 435 km from Santos fields in the Surat and Bowen basins of Southeast Queensland to an LNG plant proposed for Gladstone on the Queensland central east coast.

Petronas took a 40% interest in the project in May 2008. Santos has the remaining 60%.

The agreement underpins volumes needed for the first LNG train for the project and provides a strong foundation for a final investment decision, which is expected during the first half of 2010.

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