Total signs deal with Santos, Petronas on Australia LNG project

09 September 2010 09:12  [Source: ICIS news]

LONDON (ICIS)--Total has signed an agreement with Santos and Petronas to acquire a 20% interest in the Gladstone liquefied natural gas (LNG) project in Australia for $750m (€593m), the French oil major said on Thursday.

Australian oil and gas exploration and production company Santos will transfer 15% of its share to Total, while Malaysian-owned oil and gas company Petronas will transfer 5% of its stake in the project.

Total said that pursuant to the agreement it would join the whole integrated LNG chain, with production from coal seam gas fields in Queensland, eastern Australia, to gas liquefaction in a dedicated plant in Gladstone on the eastern coast.

The French producer would through the agreement have the commitment to offtake 1.5m tonnes/year of LNG from the plant.

The Gladstone LNG liquefaction plant will consist of two trains with a total production capacity of 7.2m tonnes/year.

With the final investment decision expected in the next few months, the forecast start-up date for the first train would be in 2014, said Total.

Yves-Louis Darricarrere, president of Total Exploration and Production, said the acquisition reflected the group’s commitment to the development of the LNG business and would give it access to major long-term resources at a competitive price of around $2/bbl.

“Following the acquisition of an interest in the Ichthys LNG project in 2006, for which a final investment decision shall be taken by the end of 2011, the GLNG project is a new milestone for Total in Australia,” he added.

Total also said it would join forces with Santos to explore potential further cooperation between the two companies on Santos’s other gas assets in Australia.

($1 = €0.79)

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By: Hilde Ovrebekk
+44 20 8652 3214

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