Santos has signed a gas sale agreement with the South Australian government to supply 200 petajoules (PJ) of domestic gas over 10 years from 2030 to 2040 for the state's Strategic Gas Reserve.
Under the agreement, Santos will supply 20 PJ of gas annually over the contract term, with deliveries commencing on March 1, 2030, coinciding with the expiry of the company's Horizon contract with the GLNG joint venture.
The gas will be delivered ex-Moomba under an indexed pricing structure that includes prepayment arrangements.
Santos said the agreement would support the long-term future of the Cooper Basin Central Fields near Moomba, which contain more than 50% of the remaining proved and probable reserves in the Cooper Basin.
The company and its joint venture partner Beach Energy took a final investment decision in March to proceed with the Moomba Central Optimisation (MCO) project, which is aimed at unlocking the productivity of the Central Fields while reducing production costs and carbon emissions.
According to Santos, the prepayment structure of the gas supply agreement will directly support capital expenditure on the MCO project, which is planned to be delivered over three years.
The project will replace seven ageing gas-driven compressor stations with one electric-driven compressor station and add new inlet compression and power generation capacity at the Moomba Gas Plant.
"This agreement helps secure affordable domestic gas supply for South Australian industry to 2040 and enables Santos to invest in the long-term future of the Cooper Basin," said Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer.
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