Santos’ LNG production has doubled in 2015, however sales have flagged due to the drop in gas prices.
The Australian gas producer recently reached a significant milestone with the first shipment leaving the GLNG Project on Curtis Island in mid-October, which will further boost production growth.
Managing director and CEO David Knox said GLNG will be a strong contributor to the company profile.
“The delivery of GLNG is one of the most significant milestones in our company’s history. It marks Santos’ transition from a domestic gas company to an important Asian LNG player,” Knox said.
“The Seri Bakti, which is carrying the first cargo from GLNG will arrive in South Korea in the coming days.
“GLNG is the final piece of our robust LNG portfolio, which will provide a strong source of revenue for decades to come.”
Sales revenue has fallen 24 per cent in the third quarter, with the average realised price of oil down 38 per cent to $71 per barrel, however Knox said the company had undergone significant cost reductions to counter the potential loss.
“We said that we would produce more for less and this quarter’s figures are a strong reflection of that,” he said.
“Year to date production is up 10 per cent while capex is down 55 per cent and unit production costs are down 15 per cent.”
Capex guidance has been lowered by a further 10 per cent to $1.8 billion, while production guidance margin has narrowed from 57-64 mmboe to 57-59 mmboe.
PNG LNG has done well this quarter, operating at an annual rate of 7.4 mtpa, which is seven per cent more than the nameplate capacity of 6.9 mtpa.
Train 2 of the Curtis Island GLNG project is expected to be up and running by the end of the year, with first LNG expected in the second quarter 2016.