PERTH (miningweekly.com) – Oil and gas major Santos has temporarily shut down the Jon Brookes platform, offshore Western Australia, after identifying a gas leak in a subsea flange.
The company said on Tuesday that the observation of the leak occurred during routine activities on the normally un-staffed facility. The platform and pipeline were immediately shutdown and depressurised and all personnel demobilised.
Santos has notified all relevant regulatory bodies.
The company is working with customers and other parties to manage gas supply arrangements while the leak is repaired. At this stage, it is expected repairs will take approximately four to six weeks to return to full production. Varanus Island will continue producing at reduced rates and no changes to Santos’ production guidance are anticipated.
Meanwhile, the company has inked a binding agreement with fellow-listed Brickworks to extend an existing domestic gas supply agreement until 2035. The new long-term agreement will start in January 2025 and includes a possible extension.
Santos MD and CEO Kevin Gallagher said the deal would see Santos supplying up to 35 PJ of natural gas to Brickworks at competitive, stable, CPI-linked prices for 11 years from 2025, with an option to further extend the contract.
“As the largest brickmaker, Brickworks has more than 1 100 employees in Australia producing around 500-million bricks per annum on the east coast, or enough to build approximately 50 000 houses. This deal locks in affordable, reliable, long-term gas supply security for this important supplier of building materials,” Gallagher said.
“The deal is important to Santos because it provides long-term cash flows that will support our ability to fund future drilling and development in the Cooper basin, Eastern Queensland, and at Narrabri, which will bring desperately needed new gas supplies to the east coast domestic market. The deal provides critical energy security to Brickworks and the broader construction industry because it has no technically or economically feasible option on the horizon for electrification or conversion to zero-emission fuels such as hydrogen, so that without gas these products would not be able to be manufactured here in Australia.
“Santos and Brickworks share an ambition towards decarbonisation and intend to collaborate on exploring net-zero energy transition opportunities, potentially including post-combustion capture, and carbon capture and storage,” said Gallagher.
Brickworks MD Lindsay Partridge said that energy security had become a critical issue across the world, and that the company was acutely aware of the plight of many manufacturers, particularly in Europe, who had been forced to close down operations in response to sharp increases in prices, and in some cases, the inability to secure supply.
“As such, Brickworks acknowledges and supports the efforts of Santos to bring online additional supply that is dedicated to the local market, such as the Narrabri gas project. The additional gas that this project will deliver is critically needed by the domestic manufacturing industry, not to mention all Australian households,” said Partridge.
“Brickworks continues to invest significant resources to support the transition to renewable energy, and we are leading the industry in reducing energy consumption and carbon emissions. This includes our ongoing collaboration with partners in exploring waste-to-energy initiatives and investing in modern fuel-efficient kilns. For example, over the past few years we have invested close to $300-million to build new lower-emission plants in western Sydney.”
“However, with no viable substitute for natural gas broadly available across all our plants, the agreement secured today with Santos is fundamental to our energy strategy and provides the long-term certainty required to underpin our operations and the significant investments we are making on new facilities.”
Gallagher said that Santos’ Narrabri gas project is 100% committed to the domestic gas market and is a vitally important project to free up Cooper basin gas for South Australian customers and increase gas supply for east coast customers, particularly in New South Wales.
The Hunter gas pipeline was also important to get Narrabri gas to market and potentially provide a second pathway to move Queensland gas south.
“If governments are serious about getting gas prices down, they must allow the private sector to get on with the job of bringing more gas supply to market and all governments should have their shoulders to the wheel to remove barriers and accelerate investment in these projects.”