Total Acquires a 20% Interest in GLNG Project
Total announces the signature of an agreement with Santos and Petronas to acquire a 20% interest in the GLNG project in Australia, for US$750 million dollars (as of June 1, 2010), Santos and Petronas transferring 15% and 5% 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%, operator), Petronas (35%) and Total (20%).
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.
“As a leading international LNG player, Total is delighted with this acquisition, which reflects the Group’s commitment to the development of the LNG business and gives the Group access to major long term resources at a competitive price of about 2.5 dollars per barrel. Following the acquisition of an interest in the Ichthys LNG project in 2006, for which a final investment decision shall be taken by end 2011, the GLNG project is a new milestone for Total in Australia. It gives the Group further access to the Asian market, the fastest growing market for gas demand and in particular LNG, offering high value prices linked to oil prices,” said Yves-Louis Darricarrère, President, Total Exploration & Production. “GLNG is also the first coal seam gas project for Total, which is actively pursuing a strategy of investing in high quality unconventional gas assets.”
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.”
