LNG dreaming with Santos
SANTOS has big ambitions for its Gladstone liquefied natural gas project in Queensland with chief executive David Knox wanting the company to operate an LNG complex bigger than the North West Shelf.
In a conference call yesterday, Knox said the GLNG project could eventually have five processing trains producing 20 million tonnes a year.
He said the company’s ultimate goal at Gladstone was to build a 20MMtpa LNG hub that could draw gas from Queensland, South Australia and New South Wales.
“CEOs are occasionally allowed to dream and that would be the ultimate vision, that we’d have a North West Shelf-scale project on Curtis Island,” Knox said.
The GLNG project is currently a one-train 3.6MMtpa project which will use coal seam gas as feedstock. A final investment decision for the first train is expected mid-year.
Santos has a binding agreement with Petronas, which holds a 40% stake in the project, for 2MMtpa. The company is in discussions with several Asian LNG buyers for the remaining 1.6MMtpa.
Knox said that while Santos would like to introduce a third-party customer into the first train, it was not a requirement to move forward to a final investment decision.
“We are able to FID the first train with the underpinning contracts with Petronas but, as I say, what we’re really looking for in our marketing efforts right now is to sign up customers who are both interested in first-train volumes but to particularly underpin the second train so we can make that investment as close as we can to the first train,” he said.
“The marketing discussions are therefore focused around potentially offering some volume in the first train to a successful customer but also to really underpin the second train.”
Knox went on to say that the company planned to commit about $3 billion of long-lead items for GLNG in the coming months and didn’t believe there were any “real showstoppers” to getting environmental approval for the first train.
“Before we can make a final investment decision on this project we need approval of the EIS.
“That approval will, to a certain extent, drive exactly the date that we can FID.”
Friday, 19 February 2010
PNN
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