(EnergyAsia, August 31, Monday) — Australia’s Santos and GDF SUEZ, one of the world’s leading LNG companies, have announced a 40/60 partnership to jointly develop a floating LNG project in the Bonaparte Basin in Australia.
The Bonaparte LNG project aligns the interests of both companies across the full value chain, from gas field resources to plant development and downstream.
As part of the deal, Santos said it will sell a 60% interest in the Petrel, Tern and Frigate gas fields in the Bonaparte Basin to GDF SUEZ for US$200 million.
GDF SUEZ, which will become these fields’ operator in 2011, will pay for Santos’ share of engineering and design costs and make an additional payment of US$170 million upon final investment decision of the project.
GDF SUEZ will lead the development of the proposed two-million-tonne-per-year (mt/y) floating LNG terminal, and the marketing of the LNG.
The deal monetises 220 million barrels of oil equivalent (mmboe) of Santos’ contingent resources while preserving significant upside via its remaining stake in the project. At the same time, it will enable GDF SUEZ, which will lead the partnership, to lift all the LNG production for its customers in the Asia-Pacific region.
Santos CEO David Knox said: “In GDF SUEZ, we have chosen a leader in the gas and LNG industry and a company with the technical capacity to develop a floating LNG project as our partner. We are very pleased to achieve a transaction which delivers US$200 million upfront cash, unlocks 220 mmboe of contingent resource and adds to our growing portfolio of LNG growth projects.
“Further optionality exists in Santos’ other Bonaparte Basin assets, namely the Evans Shoal, Barossa and Caldita fields. We will now consider commercialisation options for these assets.”
GDF SUEZ chairman and CEO Gérard Mestrallet said: “We are delighted to be able to form this partnership with Santos and accelerate the development of our LNG business with this high quality asset. The partnership and Bonaparte Basin development is a key priority for GDF SUEZ globally. By extending our reach to the Asian market, it allows us to offer a truly global LNG marketing platform to our customers. This consolidates GDF SUEZ position as a world leader in LNG with a presence across the entire value chain and notably as the largest LNG end user in Europe and the third largest end user of LNG in the world.
“Furthermore, through this project, the goup continues to grow in the exploration and production business as this transaction will increase our long term resources.”