PNG LNG start-up boosts Santos 2014 output

OREANDA-NEWS. The start-up of the 6.9mn t/yr PNG LNG in Papua New Guinea (PNG) last year helped underpin a 6pc increase in output for Australian independent Santos in 2014 against a year earlier.

Santos reported a rise in gas, ethane, condensate, LPG and crude to 148,219 b/d of oil equivalent (boe/d) in 2014 from 139,726 boe/d in 2013. The rise in output was more pronounced in the October-December quarter when production increased by 15pc to an average of 164,130 boe/d from the same period a year earlier.

The 2014 average was in line with the company's guidance of between 142,000 and 156,000 boe/d. Santos has maintained its 2015 production guidance at 156,000-175,000 boe/d.

The contribution of output from its 13.5pc interest in PNG LNG, which is operated by ExxonMobil, offset falling crude and LPG output, as well as reduced domestic gas production in Australia and Indonesia.

Production from PNG LNG rose to 34PJ (2.5 m?/d) in 2014 from 0.1PJ in 2013 with first shipments starting in April last year. Santos also benefitted from 915,600 bl of condensate from the PNG LNG project last year compared with no condensate output previously.

Gas sales from its 11.5pc interest in the 3.7mn t/yr Darwin LNG project eased to an average of 45.21TJ/d in 2014 from 45.75TJ/d in 2013.

The higher production helped lift sales revenue by 12pc to A\$4.04bn (\$3.35bn) in 2014 from A\$3.60bn in 2013.

Gross gas production for PNG LNG was 108.6PJ in the October-December quarter, with Santos' share of output at 14.6PJ with a total of 25 LNG cargoes shipped in the final quarter of 2014 and 55 cargoes shipped last year. Total condensate output for PNG LNG during October-December was 30,435 b/d, of which Santos had a share of 4,162 b/d in the quarter.

This year is also scheduled to see the completion of the phase three expansion of the Bayu-Undan project in the Timor Sea, which is the main gas and liquids source for the 3.7mn t/yr Darwin LNG project, Santos said. It has an 11.5pc stake in Darwin LNG. More than 70pc of the phase three project is complete and on track to deliver first gas in 2015. The Darwin LNG plant shipped 14 cargoes during the October-December quarter.