Santos Unveils $400m Arcadia Gas Spend
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A week after Santos rejected that $A14.5 billion foreign private equity takeover bid, it has revealed plans to invest more than $400 million in its Arcadia gas development in Queensland’s Bowen Basin to boost guaranteed gas supplies for its Gladstone LNG export project.
The investment by Santos and its partners is in addition to the nearly $1 billion Santos said in February it would spend to develop new gas fields in Queensland’s Surat and Bowen basins to provide additional gas for GLNG, Santos said yesterday.
The Arcadia project is located near Injune, around 680 kilometres northwest of Brisbane. It will involve drilling 137 new wells, building a140-kilometre gas pipeline, a five-megawatt gas-fired power station, as well as roads.
Santos said the $400 million spend comes after a positive 13-well pilot program in the region.
Santos share price jumped 3.3% on Thursday to end at $5.86. That was more to do with a solid rebound in oil prices from the month lows reached the day before.
"This initial phase of the Arcadia development will at its peak deliver in excess of 75 terrajoules a day to the gas supply for the GLNG project. This is great news for both the domestic gas market and our LNG exports,” Santos CEO Kevin Gallagher said in a statement to the ASX yesterday.
“The Arcadia gas project will create up to 300 construction jobs and local business opportunities in the Central Highlands region, helping to sustain and boost the benefits of Santos’ and GLNG’s earlier investments,” he added.
The new wells are forecast to start production late next year and produce around 27 petajoules of gas by 2022.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.