Santos signs domestic gas supply agreement with ENGIE
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The news: Fossil fuel producer Santos has signed a non-binding memorandum of understanding with energy company ENGIE to supply natural gas from the Narrabri Gas Project into the east coast gas market.
The numbers: Under the proposed deal, Santos would supply 20 petajoules of natural gas for at least 10 years once the Narrabri project commences operations. The gas would be fully committed by ENGIE to the domestic market.
The context: The deal is subject to final investment decision on the Narrabri gas project, negotiation and execution of a binding gas supply agreement and approvals from the two parties.
Santos and ENGIE also committed to exploring decarbonisation activities through Santos’ third-party carbon management business, namely the proposed Moomba phase two carbon capture and storage project.
Santos in 2020 committed that 100% of gas it would produce from Narrabri to the domestic market.
The fossil fuel producer purchased the asset in 2011 and has invested more than $1.5 billion to date developing it as the company navigated “government moratoriums, independent scientific reviews, delayed and lengthy approvals, legal appeals and native title processes”.
What they said: Santos managing director and CEO Kevin Gallagher said that its experience of producing "Narrabri gas from appraisal wells for the Wilga Park power station that generates electricity for the northwest NSW grid” as well as its project development experience in Queensland’s Surat Basin gave the company “confidence that Narrabri gas will be a very competitive source of domestic gas supply for the east coast market”.
The source: ASX
