Partners in the Gladstone LNG (GLNG) plant will invest more than A$400 million (US$303 million) in the Arcadia gas project to help boost GLNG’s gas supply, Australia’s Santos Ltd. said May 31.
The investment in the resource rich Bowen Basin in the state of Queensland is in addition to A$900 million (US$681 million) that GLNG has already earmarked for gas developments in the state in 2018, the company said.
The deal marks Santos’ first big investment approval since it rejected a $10.8 billion takeover bid by U.S.-based Harbour Energy.
The initial phase of the Arcadia development will at its peak deliver in excess of 75 terajoules of gas a day to the GLNG project, Santos said in a statement. GLNG is looking to trim its supply and transportation costs by developing projects in close proximity to each other.
“If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start,” Santos CEO Kevin Gallagher said.
Santos operates GLNG. Its partners are France’s Total SA, Malaysia’s Petronas and Korea Gas Corp.
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