Santos Admits GLNG 1Q Output Surge

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Santos’ equity share of Gladstone LNG (GLNG) production reached 1.4 million metric tons in 1Q2017 as continued strong production from the Fairview field and improved performance at the Roma field boosted equity gas supplies, the Australian upstream independent said April 20.

The firm’s equity production was 14.8mn boe, down 6% from 4Q2016. It has maintained the 2017 production guidance of 55mn-60mn boe.

Santos GLNG’s LNG tanks at Curtis Island (Credit: Santos GLNG)

The company reduced net debt by US$400mn, to US$3.1bn. Its 1Q2017 revenues were US$684mn compared with US$600mn in the same period last year. Santos’ 2017 forecast free cash flow breakeven now stands at US$34/b, sharply lower than its US$47/b at the beginning of 2016.

Santos CEO Kevin Gallagher said company is making progress towards the target of a US$1.5bn reduction in net debt by the end of 2019.

Heavy use of GLNG complex

Santos is operator with a 30% interest in GLNG, so its 1.4mn mt first quarter equity production there implies that total GLNG in 1Q2017 was 4.6mn mt. With the launch of GLNG’s second train in mid-2016, the venture’s nameplate capacity is 7.8mn mt/yr, suggesting its utilisation was very high in 1Q2017.

This week has seen Queensland LNG projects face political criticism — particularly GLNG — for stepping up the amount of domestic market gas they have been sourced for liquefaction and export. Santos has responded by saying it will rein back on how much third-party gas it buys for GLNG.

 

Shardul Sharma