Santos also said the revised proposal would results in more gas being developed and brought sooner to market than under the rival AGL/QGC proposal.

Last week, Santos announced a proposal to buy QGC and retain most of its Surat Basin production and exploration assets, as well as its established gas contracts.

But in light of Australian Competition and Consumer Commission concerns over an earlier bid to buy QGC outright, Santos proposed spinning off the rest of QGC’s assets into a “New QGC”.

Aiming to reassure the ACCC that New QGC would be a viable competitor, Santos also committed to allow the new group to develop and sell about 60 petajoules of gas from ATP 648P, one of the exploration blocks that Santos wants to take over.

Santos also said if New QGC could not sell this gas to third parties, it would take the gas at an agreed price.

It has now also told the ACCC that under a new proposition put to QGC, New QGC would be entitled to 100PJ of ATP 648P gas.

In addition, Santos has agreed to enter a gas swap agreement that would let New QGC exchange gas in southeast Queensland for gas delivered by Santos into northwest Queensland through the pipeline to Mount Isa. This would allow the new company to expand geographically by seeking customers in the state’s northwest.

New QGC is also to get access to Santos drill rigs and the right to some capacity on the Roma-Brisbane pipeline so it can attempt to win Brisbane customers.

“Both Santos and New QGC will be developing their respective separate interests across all of QGC’s tenements,” Santos told the Australian Stock exchange yesterday.

“Santos will develop gas to supply QGC’s existing contracts, as well as compete for new market opportunities against New QGC and other gas producers. At the same time, New QGC will be developing the potential of more than 9000PJ of gas in-place in its tenements.”

Santos aims to win over QGC so that the CSM company’s board and shareholders reject a counter-proposal from AGL Energy – to pump $292 million into QGC for a 27.5% shareholding at $1.44 a share and to provide QGC with a major gas contract.

The AGL proposal already has approval from the ACCC and from the QGC board.

But QGC is still talking with Santos and will be waiting to see how the ACCC rules on Santos’ new proposal at the end of the month.

Meanwhile, Santos’ original bid to take over QGC has expired. The Santos Group succeeded in acquiring just 3.86% of QGC shares.