Energy firm Santos has lifted its proved and probable (2P) reserves estimate by 42 per cent and said it now has more than enough gas for the first phase of its $7.7 billion gas export project.

Santos, a partner with Malaysia’s state-oil firm Petronas in the
proposed Gladstone liquefied natural gas (LNG) project using coal seam
gas, said the reserves upgrade brings its total reserves to 1.44
billion barrels of oil equivalent at the end of 2009.

“The reserves build for Gladstone LNG was ahead of target and exceeded
the reserves requirement for the first train,” Santos said in a
statement on Monday.

It added that total 2P reserves – or reserves defined by the industry
as having a 50 per cent chance of recovery – for the Gladstone project
were at 4,003 petajoules as of December 31.

The reserves upgrade builds the case for Santos to approve the first
phase of its Gladstone LNG project and also improves the chance of its
subsequent expansion to include a second production train.

Santos, Australia’s third largest oil and gas producer, is targeting a
final investment decision on Gladstone by the middle of this year.

Earlier it said it was in advanced talks with several major Asian
customers for LNG from both the first and second production trains and
also on the possible purchase of an equity stake in the project.

Shares in Santos rose 1.14 per cent to $13.35 in afternoon trade,
outperforming a 0.5 per cent gain in the broader S&P/ASX 200
index.?

Source: Reuters

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