Santos Signs New Oz Long Term Supply Deal

Australian oil and gas producer Santos has signed a new gas supply agreement for the country’s east coast, its second for the month so far, which is set to run through to the end of 2024, the company said September 12.

The agreement is with Brickworks and is for supply to its operations in South Australia, Victoria, Queensland and New South Wales. The gas will be sourced from Santos’ fields in the Cooper Basin and is for 15 PJ over the life of the agreement, Santos said.

“Santos is actively participating in the wholesale commercial and industrial market on the east coast, adding to competition in the domestic market and helping to deliver more competitive natural gas prices and terms for Australian industry,” Santos managing director and CEO Kevin Gallagher said.

The deal comes at a time of heightened concerns by the region’s LNG industry following an announcement earlier this month by the Australian Labor Party that it intends to expand the LNG export controls which were implemented by the Liberal-National Coalition government last year.

“Drilling more wells and lowering production costs – extracting more gas for less money – is the best way to keep downward pressure on gas prices,” Gallagher said.

Brickworks managing director Lindsay Partridge said: “This new gas supply agreement with Santos provides our east coast operations with flexibility and certainty of gas supply at competitive prices and will underpin our strong manufacturing position in Australia”.

Santos is on track to supply about 70 PJ of gas to the east coast market in 2018, which is almost 13% of expected demand this year, Santo said.

The deal follows Santos on September 10 signing a gas supply agreement with Visy for its New South Wales operations.

Santos also exports gas as LNG through its Gladstone LNG facility in Queensland.