Santos to Sell Gladstone LNG

Australia’s Santos said it is in talks to sell an equity stake in its Gladstone liquefied natural gas (LNG) export project, part of a move to boost growth.

The company said it was in discussions with a number of Asian LNG buyers about potential sales from the project, including the potential for buyers to buy an equity stake.

Australia’s largest oil and gas producer said it expects to make more announcements about gas sales before making a final investment decision on the project in mid-2010.

Santos has previously said it was looking to sell up to a 9% stake in Gladstone, which would leave it with 51%. Malaysia’s Petronas holds a 40% stake.

After having raised A$3bn (US$2.79bn) last year to strengthen its balance sheet, analysts said that sale of a stake in the project would reduce the chance that Santos would need to go back to equity markets, reports Reuters.

Gladstone is located near a port in the northeastern state of Queensland and has an LNG production capacity of 3.5 million tonnes per year.