Santos trains its gaze on Japanese
The Age
Friday August 21, 2009
SANTOS says plans to sell more liquefied natural gas from its $8 billion Queensland project are well advanced and that it is focused on interested customers in Japan.Santos chief executive David Knox made the comments as he released Santos' results for the half-year to June 30, which revealed an underlying profit of $102 million, down from $283 million for the previous corresponding period.The result was well above the market consensus, which was $50 million.Mr Knox said a 39 per cent drop in the average price of oil had reduced sales revenue to $1.02 billion, from $1.38 billion in the first half of 2008. That drop was partly offset by higher gas prices and a weaker Australian dollar.Oil production fell 4 per cent to 26.6 million barrels of oil equivalent (mmboe) for the June half and Santos said it would retain its guidance for the full year of between 53 mmboe and 56 mmboe.Mr Knox said Santos was keen to advance a second LNG train at Gladstone and that a final investment decision could be made shortly after final decision was made on the first train next year.He said there were 15 potential buyers for Gladstone LNG in Japan."We have a very good relationship with them," Mr Knox said. "We will be marketing gas for the second train particularly as part of an equity sell-down; we would like to go from 60 per cent to 51 per cent on the Gladstone project."Credit Suisse said it expected that another Gladstone gas deal would be reached by the end of this year.Santos has already signed a two-train binding agreement with joint-venture partner Petronas to supply 3 million tonnes a year over 20 years, in a deal Mr Knox said was "probably the biggest of the lot"."On the Petronas deal, we quietly did one of the largest, if not the largest, trade deal done by Australia and certainly the largest LNG deal that has been done this year," he said.ExxonMobil this week signed a deal it says is worth $50 billion with state-owned PetroChina.Mr Knox said Santos remained the front runner in Queensland LNG but that he would welcome consolidation among the four main players."There are collaboration opportunities. If we are able to do it, it will improve capital efficiency," he said. "We have space for five trains and we are planning on two at this stage. You need two people to decide to dance €” we will just have to see if anyone wants to join us."Mr Knox said this week's $US370 million ($A445 million), 60 per cent sale of three Timor Sea gas fields to France's GDF Suez would further strengthen Santos. But he said no costings had been done on the floating LNG project, known as Bonaparte LNG, and that first gas would be some time after 2014.Santos provided no production guidance but Mr Knox said the outlook would be "relatively flat".An interim dividend of 22 was declared, in line with the previous period, to be paid on September 30 for shareholders on the register by September 1.Santos shares finished 6 lower at $14.65
© 2009 The Age
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