PERTH (miningweekly.com) – Oil and gas major Santos and its joint venture (JV) partner Beach Energy have extended an ethane gas supply agreement with Australia’s sole manufacturer of polyethylene, Qenos.

The new sales agreement will enable Qenos to maintain its operations at Botany Bay in Sydney and secure over 500 jobs associated with its New South Wales activities.

The sales agreement runs from January 2020 to December 31, 2025 and is expected to supply up to 15 PJ of ethane a year. The ethane required by Qenos is processed via a dedicated facility at the Moomba Gas Plant, operated by Santos on behalf of the Cooper Basin JV in north-eastern South Australia.

Santos MD and CEO Kevin Gallagher said the company has had a long association with Qenos and is pleased to work together to secure Australian jobs and power Australian industry.

“Santos is continuing to invest in new natural gas supply for the domestic market around the nation, including in the Cooper Basin where we increased production last year for the second year in a row and drilled a record 115 wells. Here in New South Wales, we want to bring the Narrabri Gas Project to fruition,” Gallagher said.

“The only way to put downward pressure on gas prices for New South Wales customers is to develop new gas supplies closer to market. A commercial baker in Sydney pays around A$26 400 more every year for gas than a similar business in Brisbane.

“Santos’ Narrabri gas project would be developed solely for the east coast domestic market and could produce enough gas to supply up to half New South Wales' needs, so it’s vital that the assessment and approval process is completed as soon as possible and, if approved, we will get on with the job of delivering competitively-priced Narrabri gas for New South Wales households and businesses.”

Beach Energy MD Matt Kay said he was extremely proud to be involved with a sales agreement that was critical to supporting Australian manufacturing jobs.

“As a proud Australian company, we are a key supplier of natural gas to the domestic market and the Qenos contract again highlights our commitment to local customers,” Kay said.

“Beach will look to build on this in the coming years as we make significant investments in Victoria and South Australia to bring more gas supply to the domestic market. This financial year alone, Beach is spending around A$500-million to develop new gas for the east coast market.”