If approved, the limit on individual shareholding in Santos would be removed 12 months after the repealing legislation comes into effect.

According to AAP, both Federal Finance Minister Nick Minchin and Foreign Minister Alexander Downer have supported the decision to remove the cap, while the state’s Liberal Opposition has said it would consider the legislation when it was presented.

In return for lifting the cap, Santos has agreed to keep 90% of its South Australian operations and to spend $60 million over the next 10 years on corporate sponsorships.

If any of these conditions are breached, the company must cough up $100 million in compensation to the State Government.

The shareholding restriction was imposed 28 years ago to protect Santos from takeover by Alan Bond, in a bid to protect the state’s vital gas supplies.

But Santos has long lobbied against the cap, arguing it was restricting the company’s growth and the value of its shares.