October 15th 2010
SOUTH Australian oil and gas major Santos has raised another $420 million in funding for its Gladstone liquefied natural gas project.
The new funding through the Euro hybrid market brings the total amount of hybrid capital raised by Santos in the market to more than $1.4 billion since September this year.
The follow-on issue represents another significant step towards funding Santos' share of the GLNG project, with a planned final investment decision before the end of the year.
Santos executive vice-president and CFO Peter Wasow said the follow-on hybrid issue demonstrates Santos' strong reputation in the capital markets and its commitment to maintain an efficient capital structure.
"Given the strong support received for our initial hybrid issue in September, we received significant demand from investors for a follow-on issue.''
"As we continue to proactively finalise our GLNG funding strategy, it was a logical decision to return to the Euro hybrid market and further reduce on a dollar for dollar basis the amount of potential equity that may be required to maintain our BBB+ credit rating.''
French company Total recently bought a 15 per cent stake in the GLNG project for $650 million.
The coal seam gas project had also secured more than $100 billion of contracts, making it one of the largest export deals in Australia's history.
Santos has yet to publish an estimate of the cost of building GLNG but analysts forecast it will cost about $16 billion.
It now has a 45 per cent share, meaning its funding commitment would be about $1 billion more than it has already secured.
Santos is awaiting federal assessment of GLNG. It aims to make a final investment decision by the end of the year if federal approvals are forthcoming