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May 31, (Reuters) - Partners in the Gladstone liquefied natural gas (GLNG) plant will invest more than A$400 million ($303 million) in the Arcadia gas project to help boost GLNG’s gas supply, Australia’s Santos Ltd said on Thursday.
The investment in the resource rich Bowen Basin in Queensland state is in addition to A$900 million that GLNG has already earmarked for gas developments in the state in 2018, it said.
The deal marks Santos’ first big investment approval since it rejected a $10.8 billion takeover bid by U.S.-based Harbour Energy.
The initial phase of the Arcadia development will at its peak deliver in excess of 75 terajoules of gas a day to the GLNG project, Santos said in a statement.
GLNG is looking to trim its supply and transportation costs by developing projects in close proximity to each other.
“If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start,” Santos Chief Executive Officer Kevin Gallagher said.
Santos operates GLNG. Its partners are France’s Total SA , Malaysia’s Petronas and Korea Gas Corp (KOGAS).
Santos shares rose about 1.9 percent by 0025 GMT, ahead of a 0.5 percent rise in the broader market.
$1 = 1.3208 Australian dollars Reporting by Ambar Warrick in Bengaluru; Editing by Richard Pullin