Santos To Supply Australian Miner
Leading Australian oil and gas producer Santos has entered into an agreement to supply mining company New Century Resources for some 9 petajoules (240mn m3) of gas spread over four years, New Century said January 15.
While full terms of the deal are confidential, the agreement was established through a “highly competitive tender process” and is worth in the order of A$100mn ($79.38mn), New Century said.
The gas is to be supplied to Mount Isa power generation facilities in Queensland to be used for restarting operations at the Century Zinc Mine, scheduled for Q3 this year.
“Securing gas in the currently tight Australian east coast domestic market was identified early by New Century management as a key risk to the successful development of the project," said New Century. It said the deal would allow it "access to gas fired power generation for the operations as opposed to more expensive on site diesel generation."
Santos executive vice president for marketing and trading Phil Byrne said: “The Gas Sales Agreement we’ve reached is innovative in both its flexibility and pricing, making it commercially attractive for both parties. Santos is absolutely committed to working in partnership with Australian industry to deliver competitively priced domestic gas and this is a great example of that commitment."
Santos, which is one of the largest independent oil and gas producers in the Asia-Pacific region, has five core long-life gas assets, which are the Cooper Basin, Gladstone LNG, Papua New Guinea, Northern Australia and Western Australia Gas.