Santos runs two LNG export trains out of Gladstone, Queensland, which siphons up East Coast gas and ships it to Asia (mostly China).
Since Santos’ LNG export trains came online in 2015 (alongside others), the volume of gas produced on the East Coast has doubled, while 25% less gas has been supplied to domestic users.
The resulting artificial shortage of gas has, in turn, tripled domestic gas prices to an average of around $12 a gigajoule, hollowing out industry, raising electricity prices, and driving up inflation.
With this background in mind, it is disturbing to read that Santos has backed an $18.7 billion takeover bid from Abu Dhabi-led consortium:
Australian oil and gas producer Santos (STO.AX), opens new tab said on Monday it intended to support an $18.7 billion takeover bid from an international consortium led by Abu Dhabi’s National Oil Company (ADNOC), which is looking to grow a global gas business.
ADNOC, through its investment arm XRG, with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle has offered $5.76 (A$8.89) per Santos share, which was a 28% premium to the Australian company’s close on Friday…
With Santos in its fold, the XRG-led consortium would gain control of two Australian liquefied natural gas operations – Gladstone LNG on the east coast and Darwin LNG in the north, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos’ interests in Papua New Guinea are considered its most prized assets…
Santos said the deal required approval from Australia’s Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission (ASIC), National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States (CIFIUS).
Losing critical national energy assets to the Middle East is the last thing that Australians need. It would cement Australia as a land to be pillaged by foreign powers.
The Australian government should respond in kind with an East Coast domestic gas reservation policy and/or levies on gas exported out of Gladstone.
Australia’s gas belongs to Australians. Their interests must come first.
