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    Santos Points to Strong GLNG 1Q Output

Summary

Santos’ GLNG LNG production increased to 1.4 million metric tons during 1Q as continued strong production from Fairview and improved Roma field performance boosted equity gas supply.

by: Shardul Sharma

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Santos Points to Strong GLNG 1Q Output

Santos said April 20 that Gladstone LNG (GLNG) gross 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.

Santos is operator of GLNG with a 30% interest, so its net share of this would be 420,000 mt. 

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

Given that the second of GLNG's two trains started production in mid-2016, a 1.4mn mt first quarter gross production suggests that GLNG, operated by Santos, is close to achieving the venture's nameplate capacity of 7.8mn mt/yr. 

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.

 

Note: an earlier published version of this story incorrectly said that 1.4mn mt was Santos's 30% equity share of GLNG production in 1Q.

 

Shardul Sharma