Curtis Island's GLNG drops $1.05 billion in value

SANTOS has taken $1.05billion off the value of its Gladstone Liquefied Natural Gas plant on Curtis Island as low oil and gas prices hit the plant's profitability.

The announcement through the ASX comes ahead of the energy company's half-year accounts released on Friday.

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BURNING MONEY: Santos has written-off $1.05 billion from the value of GLNG.
BURNING MONEY: Santos has written-off $1.05 billion from the value of GLNG. Ashley Roach - Fullframe Photogr

"Sustained low oil prices continue to constrain capital expenditure and impact GLNG," the report reads as the spot price for gas has dropped by 25% in Singapore this year and the Australian price has continued to rise.

"During the course of 2016 there has been a slower ramp-up of GLNG equity gas production and an increase in the price of third party gas.

"This has caused Santos to adjust its upstream gas supply and third-party gas pricing assumptions for GLNG."

Santos chairman Peter Coates said it was disappointing and the change reflected the reality of the current oil price.

"However, we firmly believe in the strong long-term growth of LNG consumption and demand globally," he said.

Santos managing director and chief executive officer Kevin Gallagher said the write-off would not affect GLNG's ability to meet its long-term contracts.


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