San­tos signs do­mes­tic gas deal

The Australian Energy Review - - NEWS - El­iz­a­beth Fabri

SAN­TOS has inked a deal with French power com­pany ENGIE to sup­ply gas to Pel­i­can Point power sta­tion next year to help meet South Aus­tralia’s en­ergy needs.

Sched­uled to be­gin in Jan­uary, the 15 Pe­ta­joule (PJ) con­tract would in­volve a mix of Glad­stone LNG (GLNG) and San­tos port­fo­lio gas.

The deal fol­lowed ENGIE’S an­nounce­ment ear­lier this year it would com­plete a $40 mil­lion up­grade of the sec­ond unit’s tur­bine to re­turn the power sta­tion to its full ca­pac­ity of 479 megawatts (MW), along with a sep­a­rate off­take deal with Ori­gin En­ergy.

San­tos man­ag­ing di­rec­tor Kevin Gal­lagher said en­ergy se­cu­rity for South Aus­tralia was a pri­or­ity, and the ENGIE deal demon­strated the com­pany’s will­ing­ness to work with its GLNG part­ners PETRONAS, To­tal and KOGAS, amid a loom­ing east coast do­mes­tic gas short­age.

“It also shows we are work­ing with the Turn­bull Gov­ern­ment to de­liver af­ford­able and re­li­able en­ergy to all Aus­tralians, and as a lead­ing do­mes­tic gas pro­ducer across this coun­try, San­tos is best placed to bring en­ergy se­cu­rity to Aus­tralian house­holds and busi­nesses,” Mr Gal­lagher said.

“This agree­ment demon­strates that San­tos is de­liv­er­ing for Aus­tralians, and that nat­u­ral gas has a cru­cial role to play if Aus­tralia is go­ing to have a bal­anced and prag­matic ap­proach to en­ergy pol­icy.”

Aus­tralian Pe­tro­leum Pro­duc­tion and Ex­plo­ration As­so­ci­a­tion (APPEA) chief ex­ec­u­tive Mal­colm Roberts said the San­tos an­nounce­ment – which fol­lowed re­cent gas sup­ply an­nounce­ments from Shell and Ori­gin – showed the gas in­dus­try was tak­ing nec­es­sary steps to meet the needs of do­mes­tic cus­tomers.

“This ENGIE agree­ment, cou­pled with other ac­tions the in­dus­try has taken since March, shows gas pro­duc­ers are de­liv­er­ing,” Mr Roberts said.

“It is ab­surd that we are talk­ing about the pos­si­bil­ity of a sup­ply short­fall in 2019 when we have sub­stan­tial re­sources in the North­ern Ter­ri­tory, Vic­to­ria and New South Wales that could be de­vel­oped.

“Some states need to de­cide whether they wish to be part of the prob­lem or part of the so­lu­tion.

“San­tos’ an­nounce­ment pro­vides fur­ther ev­i­dence that mar­ket in­ter­ven­tions, such as the Aus­tralian Do­mes­tic Gas Se­cu­rity Mech­a­nism, are un­likely to be re­quired.”

Mr Gal­lagher said San­tos would an­nounce fur­ther do­mes­tic sup­ply con­tracts in com­ing months to sup­port Fed­eral Gov­ern­ment ef­forts to im­prove en­ergy se­cu­rity and prices for house­holds and in­dus­try.

Im­age: ENGIE.

Pel­i­can Point power sta­tion is ca­pa­ble of ca­ter­ing for about 25 per cent of South Aus­tralia’s needs.

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