GLNG’s chang­ing times

San­tos spruces more gold stars for GLNG’s grow­ing do­mes­tic sup­ply

The Observer - - NEWS - Te­gan An­nett te­gan.an­nett@glad­sto­neob­server.com.au

SAN­TOS is tak­ing steps to get into the good books of Aus­tralia’s gas sup­ply, se­cur­ing swap deals and promis­ing more do­mes­tic gas from its Cur­tis Is­land LNG ex­port site.

Off the back of on­go­ing scru­tiny from fears of a gas short­age, the Cur­tis Is­land LNG ex­porter yes­ter­day an­nounced a three-year swap deal se­cur­ing 18 PJ of gas each year for South Aus­tralia.

The ar­range­ment means San­tos will take de­liv­ery of gas at Wal­lum­billa from Jan­uary 2018 and then pro­vide an equiv­a­lent quan­tity of gas at de­liv­ery points in the south­ern do­mes­tic mar­ket.

It’s the lat­est an­nounce­ment as San­tos’ GLNG site, which is the only Cur­tis Is­land LNG site to ful­fil in­ter­na­tional ex­ports with third-party gas, con­tin­ues to be in the fir­ing line if the Fed­eral Gov­ern­ment trig­gers its new gas sup­ply mech­a­nism which could di­rect ex­ports.

“This trans­ac­tion demon­strates the abil­ity for in­dus­try to ef­fi­ciently work to­gether and sup­port the Fed­eral Gov­ern­ment in bring­ing more sup­ply into the do­mes­tic mar­ket and help mit­i­gate gas sup­ply con­cerns,” chief ex­ec­u­tive Kevin Gal­lagher said.

It fol­lows re­cent news that pro­duc­tion from GLNG would be capped at six mil­lion tonnes per year from 2020 po­ten­tially un­til the mid 2020s, marginally un­der its full ca­pac­ity of 7.2 mil­lion tonnes.

Mr Gal­lagher re­vealed the pro­duc­tion cap to The Aus­tralian, off the back of the Aus­tralian En­ergy Mar­ket Op­er­a­tor’s fears of a gas short­age that were based on fore­casts that GLNG would ex­port at its max­i­mum vol­ume.

The Cur­tis Is­land site, which San­tos has a 30% stake in, helped de­liver a 44% LNG sales rev­enue boost, its first half re­port showed.

The re­port, released ear­lier this month, also showed San­tos re­duced debt by $US600m to $US2.9bn.

PHOTO:CON­TRIB­UTED

DO­MES­TIC IN­CREASE: San­tos' GLNG project will in­crease its do­mes­tic gas sup­ply from Cur­tis Is­land.

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