Santos Place, overlooking the Brisbane River
Over the past couple of years Santos, and a number of Australian based companies, have been working towards supplying the markets in China and other Asian countries with natural gas sourced from coal seams, called coal seam gas (CSG), similar to the CBM plays in Canada. These deals involve the federal and state governments and require approvals from different levels of government and different interest groups, including landowner and environmental groups. In addition to getting approval from all of these groups, the company also requires approval from it's own board and the boards of the partnership companies. On January 13, Santos achieved the green light and released the final investment decision (FID)...the project was officially declared a "go".
This is a very big deal, much bigger than anything that either of us have been involved with before. The Weekend Australian reported the numbers this way: Santos, with it's partners Petronas, Total and Kogas, are building a liquified natural gas (LNG) plant at Gladstone, 550 km north of Brisbane on the north-east coast of Queensalnd, that will have the capacity to ship 708 million tonnes of LNGs per year. The LNG plant will be ready to start shipping in 2015. This project has a capex of $18 Billion and will create 5000 jobs over the next few years, as the plant is built and becomes operational. This is not the only LNG project that is ramping up right now, BG/CNOOC/Tokyo Gas have a project valued at $18 Billion and Origin/Conoco have a $35 Billion project (wow). All of these projects will be on stream by 2015 and will create thousands of jobs along the way, both temporary and permanent, including the two that we have!
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