Santos Ltd. (STO.AU) Tuesday added a third liquefied natural gas terminal to its growth agenda and netted up to US$370 million in the process by selling some of its undeveloped gas interests offshore Northern Australia to France's GDF SUEZ (GSZ.FR).

Santos has sold 60% of its Petrel, Tern and Frigate fields in the Bonaparte Basin to the global integrated energy heavyweight for a cash consideration of US$200 million.

It will get another US$170 million when a final investment decision is made on a proposed floating LNG platform, which would use the fields' gas as feedstock. The timing of the investment decision hasn't yet been specified, a Santos spokesman said.

The deal is a big win for Santos, which said when it launched a A$3 billion equity raising earlier this year that it was considering selling assets in the Timor Sea. Analysts and media had speculated it could get around A$500 million from the auction.

The GDF SUEZ deal covers just 30% of Santos' Timor Sea assets and the Santos spokesman said the company is "considering its options" in regard to its Evans Shoal, Barossa and Caldita gas fields, also in the Bonaparte Basin.

The deal gives GDF SUEZ its first foothold in the Australian exploration and production sector and enables it to extend its LNG portfolio, already strong in Europe, Africa and the Middle East, into the fast-growing Asia Pacific region.

It also provides Santos with more capital to help fund its other two LNG initiatives. These include participating in the construction of massive onshore terminals at Gladstone in Queensland state and Papua New Guinea.

At 0335 GMT, shares in the Adelaide-based company were up 1.3%, while the benchmark S&P/ASX 200 index was down 0.3%.

"It's a good deal," said an energy analyst from a large international investment bank, who wished to remain anonymous. "Especially for a resource that was pretty small and had limited commercial options."

The value of the deal converts to about 30 cents per gigajoule of gas, which is well above the 10 cents per gigajoule paid by France's Total SA for a stake in Japan-based Inpex's nearby Ichthys field in 2006, a person familiar with the matter said.

The person said the value of the deal for Santos was a reflection of the level of competition in the bidding process.

Nearby assets also include Italy-based Eni SPA's Blacktip field and that company was widely speculated as a likely bidder for Santos' assets.

Santos said the floating LNG platform will produce 2 million metric tons a year.

Royal Dutch Shell PLC is also considering a floating LNG option for its nearby Prelude discovery.

Investors, however, could be forgiven for being a little skeptical that these platforms will get built, considering there's already about 12 LNG platforms slated for startup in Australia and Papua New Guinea in the next five years, and they're all competing for customers.

Still, gas from the Petrel, Tern and Frigate fields could be sold to rival LNG plants if the floating options don't come to fruition.

Santos said the floating LNG project will allow GDF SUEZ to capitalize on the considerable work it's already committed to floating LNG terminals.

GDF SUEZ Chairman Gerard Mestrallet said the Bonaparte Basin development is a key priority for the company globally. "By extending our reach to the Asian market, it allows us to offer a truly global LNG marketing platform to our customers," he said in a statement.

Floating LNG is increasingly being considered as an effective way to commercialize stranded gas resources too small to support the construction of onshore LNG terminals and their associated pipeline infrastructure.

Citigroup said July 29 that since the world's first floating LNG terminal opened in 2005, the industry has grown and is now a major focus of LNG development.

It said expenditure on floating LNG facilities is forecast to reach US$27 billion between 2009 and 2015, quoting independent research firm Douglas Westwood.

The Santos deal follows Samsung Heavy Industries Co. announcing last month that it has received a US$5 billion order from Shell to build a floating LNG facility, and been awarded exclusive rights to build another nine for Shell over the next 15 years.

-By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com