Total buys 20 percent in Australia LNG project-UPDATE 1

Trade the News

Thursday September 09, 2010 11:59:01 PM GMT

* Santos agrees to sell 15 pct stake to Total

* Petronas sells 5 pct stake to Total

* Santos signs supply deal with Petronas, Total for 5 Mtpa

(Adds details on agreement)

SYDNEY, Sept 9 (Reuters) - France's Total <TOTF.PA> has agreed to buy a 20 percent stake in Australia's Gladstone liquefied natural gas project from Santos <STO.AX> and Malaysia's Petronas, Santos said on Thursday.

Santos said it was selling a 15 percent stake for A$650 million ($597.4 million), with Total buying 5 percent from Petronas.

Santos will now own 45 percent of the project, while Petronas will have 35 percent and Paris-based Total 20 percent.

Santos said it had signed a binding offtake agreement with Petronas and Total for 5 million tons per annum (Mtpa), raising its supply deal with Petronas from 2 Mtpa to 3.5 Mtpa.

The 20-year offtake agreements with Total and Petronas will begin in 2014, when the project will produce its first cargo, pending a final investment decision on the project.

Total, a leading LNG producer with interests in a number of LNG projects worldwide, also owns a 24 percent stake in the Icthys LNG project in Australia's Browse basin.

Santos plans to make an investment decision on the first production train at Gladstone by year-end, while an approval for the second train is due about a year later.

Earlier this month, sources said Korea Gas Corp (KOGAS) <036460.KS> aimed to buy a roughly 10 percent stake in the project and take more than 2 million tonnes a year in LNG.

A Santos official was not immediately available to comment on talks with KOGAS.

(Reporting by Rebekah Kebede and Miyoung Kim; Editing by Ed Davies)

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