Australia’s energy player Santos has landed a multi-year gas supply agreement with the South Australian government.
Santos has executed a binding term sheet with the South Australian government for the long-term supply of gas to support the transformation of the Whyalla Steelworks into a low-emissions green iron facility, subject to certain conditions. The ten-year term is for 20PJ of gas per year delivered ex-Moomba, with the first gas starting from March 1, 2030, coinciding with the expiry of the company’s Horizon contract with the GLNG joint venture.
Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, commented: “This agreement secures jobs here in Adelaide and the Cooper Basin for at least the next 15 years. With this agreement, Santos is also proud to be playing an important role in South Australia’s broader economic future by supporting the government’s plan for sale and transformation of the Whyalla Steelworks.
“Santos gas will be used to enable Whyalla to deploy direct reduced iron technology that can process local magnetite ore to produce low-carbon iron. This will keep jobs in Whyalla and the Cooper Basin, and reduce emissions by approximately 50 per cent compared to the former coal-fired blast furnace operations.”
The Australian player claims that this agreement will support the long-term future of the Moomba Central Area of the Cooper Basin in South Australia. Santos employs around 700 people in Adelaide and another 400 in Port Bonython, Whyalla and Moomba.
The firm spent more than A$370 million (about $260.85 million) with South Australian businesses last year, invested A$6 million (around $4.23 million) in sport and community initiatives, and paid about A$60 million ($42.3 million) in state royalties and taxes.
“Our agreement today is great news for the Upper Spencer Gulf and South Australia because industries like the Whyalla Steelworks rely on affordable energy combined with decarbonisation to grow into the future – keeping jobs, skills and business opportunities here in the region to support vibrant local communities for decades to come,” added Gallagher.