--Santos confident of proving up enough gas
--LNG project to supply South Korea, Malaysia
SYDNEY -(Dow Jones)- Santos Ltd. (>> Santos Limited) said Wednesday it proved the existence of less reserves than expected last year to feed a US$16 billion Australian gas export project contracted to supply South Korea and Malaysia with energy for decades.
The Australian company continued to express confidence in its reserves coverage, while analysts at Macquarie Group agreed that Santos, while cutting it closer than some rival projects, will probably come up with the gas it needs.
Santos and partners, including Total SA, want to start shipping liquefied natural gas, or LNG, to customers including Korea Gas Corp. from their Gladstone LNG project in Queensland state from 2015. Theirs is one of close to a dozen Australian gas terminals destined to play a crucial role in the region's long-term energy security.
Four projects planned for Queensland will be fed with coal seam gas, an unconventional fuel trapped in coal beds hundreds of meters underground. Rival projects involving BG Group PLC (BG.LN) and ConocoPhillips (>> ConocoPhillips) have vast reserves, but analysts say Santos is the most exposed to a potential shortfall.
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