Santos takes $US1b impairment charge on LNG project

Monday, 15 Aug 2016 10:07:34 | Thuy Ong

The two Santos GLNG storage tanks at Curtis Island in Queensland. (Supplied)

Gas and oil producer Santos has revealed it will take a $US1.05 billion impairment charge on its Gladstone liquefied natural gas (GLNG) project, hit by low oil-prices, a slower ramp up of gas production and an increase in the price of third-party gas.

"The expected impairment charge for GLNG is clearly disappointing but it is a consequence of the challenging environment which we now face," said chief executive Peter Coates.

"We have decided to adjust our long-term operating assumptions for GLNG to reflect the reality of the current oil price environment."

Santos, which owns a 30 per cent stake in the venture, also flagged sustained low oil prices would continue to constrain capital expenditure.

Australia's largest ever investment boom - which saw $200 billion pumped into LNG during the past decade - has crashed spectacularly and left the Federal Government with little or no revenue to show for it, as the price of LNG has crashed 75 per cent.

The country's gas is now being exported to Asia at close to the cost of production, leaving investors with marginal returns.

Santos' half-year result is due on August 19.

AustraliaPlus

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Santos takes $US1b impairment charge on LNG project

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