Santos, Gladstone LNG Partners to Acquire Source Fields
This article was first published on Rigzone here
Santos Ltd and its partners in the Gladstone LNG (GLNG) project in Queensland have signed agreements to buy the Greater Meridian coal seam gas (CSG) project in the state's Bowen Basin.
Santos said in an online statement its acquisition "converts a long-standing contracted supply relationship into GLNG equity production, consistent with Santos' strategy to backfill and sustain GLNG with owned production".
Each of the GLNG co-venturers - Santos, Malaysia's state-owned Peroliam Nasional Bhd, South Korea's state-owned Korean Gas Corp and France's TotalEnergies SE - entered into acquisition agreements with Brisbane-based Westside Corp (51 percent owner) and Japan's Mitsui & Co Ltd (49 percent owner) for a gross price of around $310 million (about AUD 430 million).
"Each GLNG partner will acquire a pro-rata share in line with its GLNG joint venture interest, with Santos acquiring a 30 percent interest and becoming operator of the project upon completion of the transaction", Santos said. GLNG is operated by the unincorporated joint venture GLNG OPL under the 2011 joint venture agreement. Santos is operator of the upstream acreage, gas gathering systems and gas processing hubs, according to the GLNG website.
The GLNG partners will pen a new joint operating agreement after the completion of the transaction, expected by yearend subject to regulatory approvals and other customary conditions, Santos said.
Meridian supplies GLNG via the facility's transmission pipeline and the domestic market via the Queensland Gas Pipeline. "Current production is 47 tJ/d [terajoules per day], with approximately 90 percent supplying GLNG under a long-term gas sales agreement and the remainder supplying domestic gas customer Queensland Nitrates at Moura", Santos noted.
As of yearend 2025 the Greater Meridian held 322 petajoules (pJ) gross proven and probable reserves and 346 pJ gross 2C resources, according to Santos.
"The 2P reserves are predominantly contained within the PL94 license area and comprise developed and undeveloped well locations", Santos said. "The 2C resources include volumes associated with the development opportunity north of the existing producing area (Mungis CSG project).
Take control of your future.
Search THOUSANDS of Oil & Gas jobs on Rigzone.com
>","yLinkElement":"context_link","yModuleName":"content-canvas","yTrafficOrigin":"content-canvas default"}" rel="noopener noreferrer nofollow"> Search Now >>
"The acquisition is underpinned by the producing base asset. The potential Mungis CSG project development will be assessed as a future standalone investment decision".
Santos managing director and chief executive Kevin Gallagher said, "The Meridian acquisition meets our disciplined capital allocation criteria, exceeds our internal hurdle rates and is value-accretive for Santos".
Mahalo Sale
Concurrently Santos announced it had completed the sale of its 42.86 percent operating stake in the Mahalo project, also in the Bowen Basin, to Brisbane-based Comet Ridge Mahalo Pty Ltd.
Santos said the divestment monetized a pre-development asset that had not been part of the company's near-term priorities.
"Comet Ridge now holds 100 percent ownership and operatorship of the entire Mahalo Gas Hub, comprising approximately 1,850 square kilometers [approximately 714 square miles] across the Mahalo Gas Project, Mahalo North, Mahalo East, Mahalo Far East and Mahalo Far East Extension permits, with 361 pJ of 2P reserves and 676 pJ of combined 2P reserves and 2C contingent resources", Comet Ridge said separately.
"Sole ownership removes the joint venture structure that Comet Ridge has previously identified as a constraint in funding and offtake discussions, and gives Comet Ridge full control over development timing, sequencing and capital allocation as Comet Ridge progresses a final investment decision".
Comet Ridge managing director Tor McCaul said, "East coast gas supply tightens from later this decade, and Mahalo sits in a very supportive jurisdiction for gas (i.e. Queensland), within easy reach of both the domestic market and the Gladstone LNG precinct".
To contact the author, email jov.onsat@rigzone.com
More From Rigzone.com, The Leading Energy Platform:
