Santos Acquires 40% Stake in Timor Sea Gas Field

Santos Ltd received approval from the Victorian Supreme Court for its A$80 million (US$40 million) acquisition of a 40 percent stake in the Timor Sea Evans Shoal gas field. Evans Shoal stakeholder Natural Gas Australia Ltd will become a wholly-owned subsidiary of Santos.

Evans Shoal is located approximately 186 miles north-west of Darwin and contains about 6.6 trillion cubic feet (tcf) of gas and is within tie-in distance of a pipeline proposed from 2004 to bring gas ashore.

The pipeline developers propose to bring gas first from the 3.4 tcf Bayu-Undan field and then from the 9.2 tcf Greater Sunrise field, with the potential for other fields to be tied in to underpin supply security.

Santos also holds an 11.8 percent interest in Bayu-Undan, and has 100 percent of the Tern field and 95 percent of the adjacent Petrel field, the latter two holding a combined 1 tcf of gas. Origin Energy Ltd has five percent of Petrel.

Those fields could also be tied-in to the planned pipeline, which would meet demand from a proposed liquefied natural gas plant as well as other projects in the Northern Territory and possibly Queensland and South Australia states. Santos and the Australian unit of Royal Dutch/Shell will each have a 40 percent interest in Evans Shoal while Osaka Gas will hold the remaining 10 percent. The Evans Shoal field lies about 125 miles south southeast of Greater Sunrise and is outside the Zone of Cooperation administered jointly by Australia and East Timor. Under the arrangement, NGA shares will convert to Santos shares at a ratio of 6.393 Santos shares for every 100 NGA shares held.