Australia: Total Acquires a 20 Percent Interest in GLNG Project

September 9, 2010
Total has inked an agreement with Santos and Petronas to acquire a 20 percent interest in the GLNG project in Australia, for $750 million dollars (as of June 1, 2010), the company reported in a news release noting that Santos and Petronas transferring 15 percent and 5 percent respectively to Total.
Upon completion of this transaction which is subject to the approval of the Australian Foreign Investment Review Board, the project will bring together Santos (45 percent, operator), Petronas (35 percent) and Total (20 percent).
Pursuant to the agreement, Total shall join the whole integrated Liquefied Natural Gas (LNG) chain, with production from coal seam gas fields in Queensland, eastern Australia, to gas liquefaction in a dedicated plant in Gladstone on the eastern coast of Australia. The plant will have a capacity of 7.2 million tonnes a year (Mt/y). Pursuant to the agreement Total will have the commitment to offtake 1.5 Mt/y of LNG, depending however on the result of ongoing discussions between the GLNG project and several Asian buyers.
In addition, Total and Santos will explore potential further cooperation between the two companies, with respect to other Santos gas assets in Australia.
“In line with the Group’s strategy to develop new types of partnerships, Total is teaming up with Santos for its expertise in gas production in Australia and with state-owned Malaysian oil and gas company Petronas for its experience in marketing LNG in Asia. Total will bring to the project its experience in successfully managing major projects such as the construction of gas liquefaction plants, and its capacity to market LNG to the Asian market” added Christophe de Margerie, Chairman and CEO. “Total has confidence in Santos’ capacity to manage the impact of the operations on the environment, and to respect local and federal regulations and guidelines.”
The GLNG Project
The integrated LNG project consists of extracting coal seam gas from the Fairview, Arcadia, Roma and Scotia fields, located in the Bowen-Surat Basin in Queensland, eastern Australia. The fields’ resources are estimated at over 250 billion cubic metres (9 trillion cubic feet) of gas. The Fairview field already produces 2.4 million cubic metres (80 million cubic feet) a day for the local market. The GLNG project will develop these fields up to a production plateau of 150,000 barrels of oil equivalent per day (9 billion of cubic meters per year (900 million cubic feet per day)), ie 30,000 boe/d in Total’s share.
The project also includes transporting the production over approximately 400 kilometres to a gas liquefaction plant in the industrial port of Gladstone, northeast of Brisbane, on the eastern coast of Australia. The GLNG liquefaction plant will consist of two trains with a total production capacity of 7.2 million tonnes (Mt/y) a year.
With the final investment decision expected in the next few months, the forecast start-up date for the first train is 2014. The LNG plant is expected to reach its plateau production in 2016 for more than 20 years.
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