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Santos Limited: Riding High On Exxon Mobil's Extremely Successful Papua New Guinea LNG Project
- Operator Exxon Mobil was able to start up its PNG LNG plant ahead of schedule and has already ramped up to full production.
- Australia firm Santos Limited has a 13.5% equity stake in the project.
- Santos' YTD revenue is up 25% yoy on the back of its share of PNG LNG production (7 cargoes) in Q2.
- Q3 will be the first full quarter of PNG LNG contributions, which are on-track for 24 LNG cargoes.
- LNG is transforming Santos: the combination of PNG LNG and next year's GLNG start-up should cause shares to double by year-end 2015.
Thu, Dec. 11, 10:45 AM
- Investors in giant gas export terminals from Australia to Canada are facing the prospect of losing nearly $250B plowed into the projects during the past seven years, as weaker oil prices threaten to wipe out returns.
- Oil-linked pricing means LNG producers stand to get much less revenue than expected on delivery of their first shipments, and oil prices have fallen so low that U.S. shale gas producers with plans to export the usually cheaper fuel to Asia suddenly find themselves facing a much tougher competitive environment.
- LNG prices in Asia have sunk below $10/MMBtu, while most Australian LNG projects would need to sell the commodity for at least $12-$14 to break even; for example, the breakeven point for the $54B Gorgon project under construction by Chevron (NYSE:CVX), Exxon (NYSE:XOM) and Shell (RDS.A, RDS.B), is ~$17.7/MMBtu.
- Other relevant tickers: LNG, TOT, COP, CEO, FCG, GASL, OTCPK:BRGXF, OTCQX:BRGYY, OTCPK:STOSF
Mon, Jul. 28, 8:27 AM
- Exxon Mobil (NYSE:XOM) says its $19B PNG LNG project in Papua New Guinea is producing at full capacity after shipments started ahead of schedule in May.
- The first stage has a capacity of 6.9M metric tons/year of liquefied natural gas: XOM and partners including Oil Search (OTCPK:OISHF) and Santos (OTCPK:STOSF) are considering an expansion of the development.
- The project is set to start loading its 15th LNG cargo, XOM says.
Fri, Jul. 18, 8:33 AM
- Bechtel, the contractor building more than $60B of natural gas export projects in Australia for companies including BG Group (OTCQX:BRGYY, OTCPK:BRGXF), faces a dispute with unions that is raising concerns about startup delays.
- Credit Suisse views the discord as potentially "really material" for BG's Queensland Curtis LNG development project, which the analysts doubt will start in Q4 of this year as planned.
- Santos (OTCPK:STOSF) and a venture between ConocoPhillips (NYSE:COP) and Origin Energy also are building liquefied natural gas projects in Queensland state to tap rising Asian demand.
Fri, Jul. 11, 5:59 PM
- As much as ~$700B oil companies have in their capital spending pipeline may no longer be needed, as the big discoveries of shale oil in recent years have added ~66B barrels of crude oil resources, enough to meet demand growth in the coming years, according to Goldman Sachs' head of European energy research Michele della Vigna.
- New projects that require oil prices to be above $80-$85/bbl to break even ought to be delayed or canceled - which could include big investments considered in Canadian heavy oil or in deep waters off shore - della Vigna says.
- It's also potentially bad news for the oil service companies that make money helping oil companies with their big projects; the winners are likely to be companies with the best roster of low-cost investments: SNP, BRGXF, BRGYY, AFRNF, STOSF.
Thu, Jun. 19, 8:15 AM
- GDF Suez (GDFZY) and Santos (STOSF) decide to back away from a multibillion-dollar plan to develop natural gas fields offshore Australia using untested technology that can convert gas to a liquid at sea.
- The thinking behind the technology is that it removes the need to build pipelines to the coast, but the cost of designing a liquefaction and storage system that can withstand the ocean has proven prohibitive.
Jun. 7, 2013, 6:01 PMBetter get your story straight: Murphy Oil (MUR) says an exploration well drilled in the Browse basin off Western Australia will be plugged and abandoned after failing to find commercial amounts of gas, and expects to expense the well in Q2. Australian partner Santos (STOSF.PK) had said a few hours earlier that it considered the well a discovery. Total (TOT) holds a 50% interest in the well, Santos 30%, MUR 20%. | 1 Comment
Jun. 5, 2013, 4:54 PMExxon's (XOM) move to invest in InterOil's (IOC) natural gas assets in Papua New Guinea has sparked concerns Oil Search (OISHF.PK) and Santos (STOSF.PK) will be left behind, but Macquarie’s Adrian Wood says the Australian partners shouldn't worry. He thinks they'll benefit from XOM’s PNG LNG gas export project regardless of whose gas is fed through it. | 2 Comments
Feb. 26, 2013, 10:10 AMUBS sees iron ore prices slumping at least 50% by Q3 to their lowest level since 2009, as China boosts production and global supply climbs. Australia is set to deliver ~80% of total new seaborne supply this year, most of it in H2 as China has “sufficient” ore and steel production declines. But first, rates may jump as a severe cyclone nears Port Hedland, the world’s largest bulk export facility. | Comment!
Feb. 22, 2013, 8:33 AMThe risk is high that a tropical low off Australia's northwest coast will strengthen into a cyclone by Sunday as it moves closer to the Pilbara mining belt which produces nearly half of the world's seaborne iron ore. The area also is home to two of the country's largest gas production facilities, and oil from offshore fields contribute about a third of Australia's 390K bbl/day of output. | Comment!
Jun. 7, 2012, 9:54 AMConocoPhillips (COP +1.5%) and Australia's Santos Ltd. sell minority stakes in the Caldita and Barossa gas discoveries offshore Australia for up to $520M to South Korea's SK Group, moving a step closer a possible expansion of the operational liquefied natural gas export plant at Darwin. Santos recently has been the subject of takeover chatter. | Comment!
STOSF vs. ETF Alternatives
Santos and its subsidiaries are engaged in petroleum exploration; the production, treatment and marketing of natural gas, crude oil, condensate, naphtha and liquid petroleum gas; and the transportation by pipeline of crude oil.
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