PERTH (miningweekly.com) – Oil and gas major Santos has inked a nonbinding supply agreement with multinational group Perdaman for the supply of 14.5 PJ/y of natural gas over a 20-year period.
The agreement was subject to a final investment decision on the Narrabri gas project, in New South Wales.
Santos on Wednesday said that the gas would be supplied to a proposed new ammonium nitrate plant near Narrabri to produce fertiliser for agribusiness. The plant would be developed in parallel with the Narrabri gas project to use appraisal and early development gas.
The plant is expected to support 700 jobs during construction and another 100 direct and 100 indirect ongoing jobs during operations. This is in addition to the hundreds of jobs that will be supported by the Narrabri gas project during both construction and operations.
Santos MD and CEO Kevin Gallagher said Santos has committed to develop the Narrabri gas project solely for the east coast domestic gas market.
“Narrabri gas will be very competitively-priced gas. Santos will bring to Narrabri our experience in Queensland where we have reduced connected well costs by a massive 84% since 2015. Keeping the cost of supply down is a very good way to keep gas prices down,” Gallagher said.
“The Narrabri gas project could produce enough gas to supply up to half of New South Wales’ needs.
“It’s also very important to us that the environment and water resources are protected, and New South Wales has very strong environmental regulation to ensure Narrabri can be developed safely and sustainably. The Narrabri gas project is currently being assessed by the New South Wales Department of Planning ahead of a decision by the Independent Planning Commission.”