By James Paton
(Bloomberg) — Santos Ltd. expects its $18.5 billion liquefied natural gas project in Australia to start production in about five months, pushing the country closer to becoming the world’s largest supplier of the fuel.
The Gladstone LNG project should begin around the end of the third quarter, the Adelaide-based company said Friday as it posted a 10 percent drop in first-quarter sales. That narrows the forecast start date of the plant from the company’s previous expectation of the second half.
The gas exports to Asian markets will give a boost to Santos, which has been under pressure amid a slide in oil prices. Australia’s third-largest oil and gas producer has cut spending and jobs while flagging the possibility of asset sales as it copes with the oil market downturn.
BG Group Plc’s rival LNG project in the state of Queensland has already begun shipments to Asia, while Origin Energy Ltd. and ConocoPhillips are building a third export development that’s set to start this year.
The plants put Australia on course to surpass Qatar later this decade as the biggest LNG exporter.
Santos’s sales in the quarter fell to A$825 million ($643 million), from A$913 million a year earlier, as the average oil price it received tumbled 44 percent.
©2015 Bloomberg News