Concerns made over lack of gas for GLNG site


A SANTOS spokesperson has said the company is looking forward to being in Gladstone "for decades to come" and poured water over suggestions the company wouldn't have enough gas to supply the GLNG plant. 

The spokesperson said GLNG was in a strong position compared to its supply agreements with other gas companies.

"We have 20 years to deliver these volumes," the spokesperson said. 

"Our portfolio totals 8000 petajoules of gas reserves including from our own gas fields and third party sources. If you include contingent resources the portfolio totals 9000 petajoules.

"We look forward to operating safely and reliably in Gladstone for many decades to come."

EARLIER 11.10am:

SANTOS has fixed its balance sheet with a $3 billion bottom-of-cycle equity raising after a three-month strategic review, but now faces analyst concerns about its ability to supply enough gas to the $US18.5bn ($26.2bn) Gladstone LNG project.
The Australian reported that Credit Suisse and CLSA, two of the few major banks not involved in the equity raising (UBS, Deutsche Bank, Citi and Goldman Sachs are all conflicted) put post-raising target prices of $5 and $5.50 on the Adelaide company, not far off the theoretical ex-rights price of $5.15.

Analysts at both banks said they were worried about Santos's ability to access enough gas to fill the two trains it is building at Gladstone.



But there have been few investor or analyst gripes about the sale of a 7.9 per cent stake to Chinese private equity player Hony Capital, or suggestions it will dissuade Brunei-backed Scepter Partners coming back with a higher bid.

Santos on Monday announced a $2.5bn renounceable rights issue at $3.85 a share (a 35 per cent discount to its last closing price of $5.91), a $500 million placement to Hony and a $520m sale of its stake in the Kipper offshore gasfield in Victoria.



It comes after Santos announced that the GLNG site was one asset that it would consider to sell, as the company worked to reduce debt.

The first shipment of gas from the GLNG site was made on September 24. 

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