Credit Suisse Equity Research – Santos Report

Credit Suisse Securities Research and Analytics, 11 March 2014

This important report by Credit Suisse economists discusses the gas price hike, particularly in relation to Santos’ admission that they developed the GLNG plant at Gladstone in part to drive up the price of gas in Australia and force a revaluation of their tenements.

The key sentence from the report from Credit Suisse says “Santos now argues that its aim in CLNG was always as much about raising the domestic gas price, and therefore re-rating large parts of the portfolio outside of GLNG, as it was about the project.” (page 4 bottom)

It goes on to say on page 5  “What is more, with a ~0.8%  drag  on  Australian  GDP  from  every $2/GJ rise in the domestic gas price, this view certainly wouldn’t have been terribly popular with politicians who approved the project.”

Click here to download the full report (1MB PDF).

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