Australia: Total increases stake in Gladstone LNG project

French major Total announced the signature of an agreement to acquire an additional 7.5% interest in Australia’s GLNG (Gladstone LNG) project from Santos for an amount of US $281.25 million. This will increase Total’s overall stake in the project to 27.5%. 
At the same time, South Korea’s Kogas has signed an agreement to join the project with a 15% stake and has also committed to lift 3.5 million tons per year (Mt/y) of Liquefied Natural Gas (LNG). Given the 3.5 Mt/y of LNG lifted by Petronas, the GLNG project has now firm offtakers for most of its two trains and a final investment decision on the two-train project will be made in January 2011. Kogas’ entry means that Total will no longer be committed to lift LNG from GLNG. 
Once the transactions have been finalized, operator Santos will hold 30%; Petronas, 27.5%; Total, 27.5%; and Kogas, 15%. The transactions are subject to the approval of Australia’s Foreign Investment Review Board. 
The GLNG Project 
The integrated Gladstone LNG project consists of extracting coal seam gas from the Fairview, Arcadia, Roma and Scotia fields, located in the Bowen-Surat Basin in Queensland, eastern Australia. The fields’ resources are estimated at over 250 billion cubic metres (Gm3) (9 trillion cubic feet) of gas. The Fairview field already produces 2.4 million cubic metres (Mm3) (80 million cubic feet) a day for the local market. The partners of the GLNG project will develop their share of these fields to reach a production plateau of 9 Gm3 per year, ie 900 million cubic feet per day (41,000 barrels of oil equivalent per day in Total’s share). 
The project also includes transporting the production over approximately 400 kilometres to a gas liquefaction plant in the industrial port of Gladstone, northeast of Brisbane, on the eastern coast of Australia. The GLNG liquefaction plant will consist of two trains with a total production capacity of 7.2 Mt/y. 
With the final investment decision in January 2011, the forecast start-up date for the first train is 2015. The LNG plant is expected to reach its plateau production in 2016 for more than 20 years. 
Source: Press release