Santos confident Australia will not trigger gas export curbs


Santos' partners in GLNG are Malaysia's Petronas PETR.UL, TotalEnergies TTEF.PA and Korea Gas Corp (KOGAS) 036460.KS.

Santos STO.AX does not expect the Australian government to curb exports from the country's three east coast liquefied natural gas (LNG) plants, as the owners will find a way to supply enough fuel to the domestic market to avert a forecast shortfall.

On Aug. 1 the competition watchdog urged the government to consider curbing gas exports under the Australian Domestic Gas Security Mechanism (ADGSM) for the first time, warning the country faced a gas supply shortfall in 2023.

Santos Chief Executive Kevin Gallagher said he expected the three east coast LNG exporters - GLNG run by Santos, QCLNG run by Shell Plc SHEL.L and APLNG run by ConocoPhillips COP.N - will reach a deal with the government to cover the forecast 56 petajoules shortfall from their uncontracted gas volumes.

Santos' GLNG plant is seen as the most likely of the three east coast LNG plants to face export curbs as GLNG takes some gas from the domestic market to help meet its LNG export sales as the project does not produce enough from its own fields.

"I'm confident GLNG won't be hit," Gallagher told analysts on a call after the company reported a record first-half profit.

Resources Minister Madeleine King is reviewing the gas security mechanism and whether to trigger it to curb exports in the near term.

"I've been really encouraged by the support and the comments that have come from Minister King around this issue," Gallagher said.

"Likewise what I've heard from our new prime minister is very encouraging. They're taking a very measured approach towards understanding this issue."

A spokesperson for King reiterated the government is continuing to work with gas and LNG producers and states and territories "to encourage new supply, and to find industry-led solutions to secure Australia's ongoing energy needs".

Santos' partners in GLNG are Malaysia's Petronas PETR.UL, TotalEnergies TTEF.PA and Korea Gas Corp (KOGAS) 036460.KS.

Gallagher said that while the threat of gas export curbs may be weighing on Santos' share price, it was also creating uncertainty for LNG investors and customers.

"These are same customers and the same investors we will need for clean fuels in the future," he said.- Reuters

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