5/06/2009 - Santos Ltd says they are in discussions with an Asian customer regarding the purchase of liquefied natural gas (LNG) from its project at Gladstone, Queensland.

“While there is no guarantee that an agreement will be concluded, the discussions are progressing well and there is the prospect that a final agreement will be reached in the near future,” the statement was made on Thursday by Australia’s third largest oil and gas producer.

A joint venture project with Malaysia’s Petronas, with an expected start rate of 3 million to 4 million tonnes per annum (Mtpa), expandable to 10Mtpa.

Three other major coal seam gas to LNG projects planned for the Gladstone region, led by BG Group, Origin Energy and Arrow Energy.

Santos also said marketing was progressing well for the remaining volumes of LNG from the ExxonMobil-led Papua New Guinea joint venture following a non-binding heads of agreement for LNG offtake with a major Asian customer.

“Santos expects further heads of agreements for LNG offtake will be announced in accordance with previous guidance,” the company said.

Construction of this project is expected to commence in early 2010.