PERTH, Australia: Petronas, the Malaysian state-owned oil company, said Thursday that it would buy a 40 percent stake in the Gladstone liquefied natural gas project from the Australian energy firm Santos for up to $2.51 billion. Petronas hopes to bolster its position as Asia's largest LNG producer. Investment in the project by Petronas, which plans to use a gas that occurs naturally when organic matter turns into coal as feedstock, follows a $12 billion takeover bid last month by BG Group of Britain for Origin Energy of Australia, and is seen as a vote of confidence for Asia's young industry for coal seam gas. Santos shares, which have surged 51 percent so far this year, jumped 15 percent to a record 21.75 Australian dollars on Thursday, before settling at 21.08 dollars, up 11.1 percent. "As for Santos, on first glance it looks like they've got an excellent deal," said Aiden Bradley, an oil and gas analyst at ABN AMRO in Sydney. "For Petronas, their LNG production in Malaysia is not growing, so this is part of their strategy to diversify in Asia." The deal marries Santos's reserves with the marketing power of Petronas, which is one of the largest LNG producers in the world. The acquisition is Petronas's first investment in coal seam gas, its first foray in Australia and, according to Dealogic, its biggest overseas acquisition. Petronas will make an initial cash investment of $2.01 billion and a further $500 million on reaching a final investment decision for a second LNG train at the Gladstone project, located in Queensland State, Santos said. The Gladstone LNG project is one of four rival LNG ventures planned in Queensland using coal seam gas as a fuel. The race to build these coal seam gas-fueled LNG plants on Australia's east coast has sped up after BG's proposed takeover of Origin, which holds the largest coal seam gas resources in Queensland. Santos, which also has a stake in a proposed LNG project in Papua New Guinea led by Exxon Mobil and a share in an operating LNG plant in northern Australia, has been seeking to expand its LNG business in a bid to gain from rising prices and a forecast surge in global demand. "Petronas is the ideal partner to help develop Santos's coal seam gas to LNG strategy, and their investment significantly advances the project," said Santos's chairman, Stephen Gerlach.