LNG Ship Headed to Queensland With Santos Plant Set to Start

Updated on
  • Seri Bakti expected to reach Australia's east coast on Monday
  • Start of Gladstone LNG plant will help shore up balance sheet

The first tanker that will ship liquefied natural gas from Santos Ltd.’s $18.5 billion plant is due to arrive at the site on Australia’s east coast next week, a sign the project is set to start exports.

The Seri Bakti is expected to reach Queensland on Sept. 28, according to Gladstone Ports Corp. The LNG project is on track to start output around the end of September, Santos reiterated on Wednesday, without commenting on the ship’s arrival.

The start of the Gladstone LNG project will help ease pressure on the struggling Adelaide-based oil and gas producer, even as a slide in energy prices cuts revenue for Australian LNG plants. Santos, seeking to shore up its balance sheet, said last month that groups interested in its assets and “strategic opportunities” had approached the company.

“With a stretched balanced sheet resulting from all the development funding they’ve had, it de-risks one element of its capital-management strategy, which is the key focus for us in a depressed oil environment,” Adrian Prendergast, an analyst at Morgans Financial Ltd. in Melbourne, said Wednesday by phone. 

Santos shares fell 2.8 percent to close at A$4.85 in Sydney, extending their loss to 66 percent over the past 12 months.

The Gladstone LNG project follows the start late last year of another Queensland export development, operated by BG Group Plc. ConocoPhillips and Origin Energy Ltd. are building a third plant on Queensland’s Curtis Island as Australia moves closer to becoming the world’s largest supplier of LNG.

The Seri Bakti is owned by MISC Bhd., controlled by Malaysia’s Petroliam Nasional Bhd., according to data compiled by Bloomberg. Petronas, as the Malaysian state-owned oil company is known, holds a stake in Gladstone LNG and is also a customer.

Petronas and Paris-based Total SA own 27.5 percent each, while Korea Gas Corp. has 15 percent. Santos holds the rest.