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Santos sacrifices export gas to east coast market

Business

The operators of the Gladstone LNG project have agreed to supply enough gas to power 330,000 homes to Australia’s east coast market over the next two years.

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Adelaide-based resources giant Santos and its partners will supply 30 petajoules of gas, which would have otherwise been exported, over 2018 and 2019, the company said.

“Over the last few months, Santos has been working constructively with the federal government and our GLNG partners to supply additional gas to the east coast domestic market,” Santos chief executive Kevin Gallagher said.

In June, the Federal Government announced it would implement the Australian Domestic Gas Security Mechanism (ADGSM), under which it can limit exports from Australian LNG projects to ensure sufficient domestic supply.

Shell Australia this week predicted the Government would declare a shortfall over the next four weeks, triggering restrictions under the mechanism.

Santos appears to have pre-empted such a move, with Gallagher telling the ASX today the company was working to meet local gas demand.

“30 PJ is a material volume of gas which could power a 228 MW power station or 330,000 homes over the two year period,” he said.

“It is further proof of our readiness to work with our partners in responding to market dynamics and meeting local gas demand and I would like to thank them for their support.

“As an Australian company we are committed to improving energy reliability and affordability for all Australians, both householders and industry.”

Santos has recently announced the delivery of up to 72 PJ of gas over four years into the south-east market through a swap agreement and the sale of 15 PJ to the Pelican Point Power Station in South Australia.

with AAP

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