Santos: Gladstone LNG on track for 2010 investment
Australian oil and gas firm Santos Ltd (STO.AX) is on track to reach a final investment decision in 2010 on the key Gladstone gas export project in Australia and still sees the project producing its first gas in 2014.
In a quarterly production report on Thursday, Santos did not provide an update on the cost of the liquefied natural gas (LNG) project, as analysts forecast an over 10 percent jump.
Santos has said the project, which will have a production capacity of 3.5 million tonnes a year in the first phase, would cost about A$7.7 billion ($7.1 billion), but UBS energy analyst Gordon Ramsay said in a report on Wednesday that it could jump to at least A$8.6 billion.
UBS said the 20 percent cost increase in the ExxonMobil-led (XOM.N) LNG project in Papua New Guinea (see [ID:nSYD484905]), in which Santos also holds a 17.7 percent stake, implied that overall project costs are now much higher than previously expected.
The Gladstone project, in which Malaysia's state-owned Petronas [PETR.UL] has a 50 percent stake, is Santos' largest growth project. It will use coal seam gas as a feedstock.
Santos, Australia's third-largest oil and gas producer, also reported a 5 percent gain in third-quarter output to 13.9 million barrels of oil equivalent (boe), and kept its full-year production outlook of between 53-56 million boe.
Revenue of A$557 million was 44 percent lower than a year ago due to lower oil and gas prices. ($1=1.079 Australian Dollar) (Reporting by Fayen Wong; Editing by Jonathan Standing)
Wed Oct 21, 2009
Reuters
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