Santos upbeat on GLNG gas supplies

OREANDA-NEWS. Australian independent Santos said the coal-bed methane (CBM) fields supplying the 7.8mn t/yr Gladstone LNG (GLNG) project in Queensland are performing better than expected. Requirements for GLNG will be met comfortably in combination with gas from third-party supplies, it added.

"We are very comfortable that we also have sufficient gas resources to fill both our trains for 20 years," Santos chief executive David Knox told shareholders at the company's annual meeting in Adelaide today.

Santos has purchased 1,800PJ (48bn m?) of gas from its suppliers. The conversion of its contingent resources to proven and probable reserves over the next 10 years could result in a further 1,200PJ, giving GLNG 9,000PJ.

Total proven and probable reserves for GLNG rose by 3.6pc to 5,603PJ in 2014 from 5,406PJ in 2013. Santos has a further 400PJ in its portfolio through the equity interest Santos owns in CBM fields, such as Spring Gulley in the Surat basin in Queensland.

The company is scaling back its unconventional gas exploration in the short term, Knox said. Santos has been exploring for tight gas, shale and deep CBM in the Cooper basin region of South Australia.

Santos is the operator and largest shareholder in GLNG with a 30pc stake. It reiterated today that GLNG is on track to start first shipments by its targeted date of by the end of September and within its \$18.5bn budget.