Santos, BG May Link Gas Pipelines

Santos is expected to ink a deal with BG Group to connect their pipelines, bolstering the supply of gas for its Gladstone LNG project in Queensland, Australia, Bloomberg said.

The move would allow the Santos and BG projects to swap gas, Rod Duke, downstream vice president for the Gladstone development, told reporters on Curtis Island, Bloomberg said.

Duke said that the arrangement allows for sensible and commercial exchange of gas and would also facilitate ongoing cooperation in the future.

The arrangement with BG is an important step and would provide more certainty for gas supply to the Santos project, which is scheduled to start in 2015, Bloomberg quoted said Nik Burns, a Melbourne-based analyst at UBS AG, as saying.

GLNG includes the development of CSG resources in the Bowen and Surat Basins in south-east Queensland, construction of a 420-kilometre underground gas transmission pipeline to Gladstone, and two LNG trains with a combined nameplate capacity of 7.8 mtpa on Curtis Island. GLNG is on track for first LNG in 2015.