In a separate statement (attached) the Premier of Queensland, the Hon Peter Beattie MP, gave his support to the project and announced the granting of significant project status.
The announcement follows extensive feasibility and site selection studies over the past 18 months, which have culminated in an agreement with the Port of Gladstone Authority for Santos to secure a site to construct a LNG export facility on Curtis Island.
Commenting on the announcement Santos' Managing Director, Mr. John Ellice-Flint, stressed the significance of the project to both Santos and Queensland, and the importance of the Government support as evidenced by the granting of a significant project declaration by the Coordinator-General. "This is a landmark project for Santos which will underwrite the continued growth of the coal seam gas industry in Queensland and is a major step forward in the development of a new export industry for the state," he said
"Gladstone LNG is a natural extension of Santos' core gas business, in line with our strength as Australia's largest producer of domestic natural gas, including coal seam gas.
"Queensland has the majority of Australia's abundant CSG resources. Santos' CSG reserves and contingent resources currently total over 5,000 petajoules with significant upside potential. "Constructing and operating major onshore gas installations is a core competency for Santos, and we are already involved in the LNG industry by virtue of our interests in Darwin LNG, the most recent greenfield LNG project constructed in Australia.
"Santos is committed to building a diverse LNG supply portfolio, as demonstrated by Darwin LNG, our strong support for a PNG LNG project and now Gladstone LNG.
"Conceptual engineering and preliminary financial analysis have confirmed that Gladstone LNG will generate acceptable rates of return for shareholders, whilst at the same time providing significant benefits for Queensland in terms of employment and royalties," he said.
Key parameters for the proposed facility are:
Following today's important steps of securing Government support and a suitable site, the next steps include:
Santos has a significant investment in CSG and produces approximately 25% of Australia's CSG. In 2007 Santos will invest approximately $150 million in expanding its CSG business. In addition, subject to Gladstone LNG project progress and Santos Board approvals, the Company expects to invest a further $200 million to progress the project during 2008.
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