Santos May Seek to Sell Shares as LNG Plans Advance, Macquarie's Wood Says

Santos Ltd., the Australian energy company planning a liquefied natural gas project in Queensland state, may seek to raise as much as A$2.5 billion ($2.25 billion) selling shares, an analyst at Macquarie Group Ltd. said.

“The chances of an equity raising are growing” as an infrastructure-sharing deal with Royal Dutch Shell Plc becomes less likely, Adrian Wood, an analyst at Macquarie in Sydney, said in an Aug. 27 report. Shell and PetroChina Co. this month completed the acquisition of Brisbane-based Arrow Energy Ltd., gaining gas for another LNG venture in Queensland.

Santos may need to raise A$2.9 billion selling shares, Mark Greenwood, an analyst at Citigroup Inc. in Sydney, said in an Aug. 26 note. Australia’s third-largest oil and gas producer said it plans to sell at least 15 percent of the Gladstone LNG venture before committing to the first phase later this year.

BG Group Plc, Origin Energy Ltd. and Santos intend to convert coal seam gas to liquid, targeting Asian demand for cleaner-burning fuel. Korea Gas Corp. is close to an agreement to buy a 10 percent stake in project for $1.5 billion, Yonhap News said Aug. 27, citing a company official it didn’t identify.

Matthew Doman, a spokesman for Santos in Adelaide, didn’t immediately return a call today.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

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