Santos Says China's ENN Looking to Import More Gas

ENN Group is looking to import more gas into China as the company works towards reducing emissions in world’s second biggest economy, Santos managing director Kevin Gallagher said.

In March ENN Group bought Hony Capital’s 11.7 percent shareholding in Australian oil and gas company Santos.

According to a report in The Australia, Gallagher travelled to China to meet with ENN Group’s chairman Wang Yusuo.

“His vision is to clean up China, to reduce emissions and pollution, by replacing coal with gas,” Gallagher told The Australian after the company’s annual general meeting in Adelaide on Wednesday. “He would be keen to work with us outside (China) in the future should those opportunities develop — his interest is in finding gas.”

In his address to shareholders, Gallagher said natural gas is the only fuel that can deliver reliable, cleaner and affordable energy to the world’s major developing economies, including China. Replacing one per cent of China’s coal fired generating capacity with natural gas generation would save 35 million tonne of carbon emissions per annum, he added.

Operational performance enhancement 

“Over the next twelve months my priority is to strengthen our capabilities in exploration, development and production to lift our operational performance,” he stated.

Santos is looking to rebuild its exploration capability to find new reserves to provide future growth. This includes an assessment of targets in the Northern Territory and Queensland, and nearfield exploration to deliver additional gas.

Gallagher emphasised the need to ensure that Santos live within its means and fund activities through operating cash flow. Company’s aim is to be cash flow break-even at between $35-40 per barrel on a portfolio basis. “We must now ensure that we live within our means and fund our activities through operating cash flow.”