Santos signs deal to supply 15PJ to Australian domestic market

Santos and its GLNG partners have reached an agreement with Origin to supply 15 petajoules (PJ) of gas to the Australian east coast’s domestic market next year.

The quantum of gas supply will be delivered from GLNG’s export portfolio and is set to amount to roughly 2% of the expected 2018 domestic demand.

The development comes after Australian energy regulators projected a potential shortfall in domestic gas supply for 2018 earlier this year.

According to Santos, the 15PJ of gas will be able to cover half of any shortfall that might arise next year.

Santos managing director and CEO Kevin Gallagher said: “Santos and our GLNG partners are delivering on our public commitment earlier this year to meet domestic gas demand, while also honouring our long-term LNG contract obligations.

“As highlighted by the ACCC earlier this month, there is already enough gas supply to more than cover expected domestic demand in 2018.

“This additional supply from GLNG is enough to also cover half of any shortfall that might arise under the ACCC’s high-demand case for 2018.

“Santos and our GLNG partners are drilling around 250 more wells in 2018 and this means more gas supply for both the domestic gas market and our LNG export markets going forward.”

Origin intends to supply the gas purchased from GLNG to its Australian household, industrial and power generation customers.

The agreement covers a period of seven months starting from April to October next year, when south-eastern Australian markets are anticipated to experience an increased demand due to winter weather conditions.

Origin previously signed an agreement to purchase an additional 41PJ of natural gas from Australia Pacific LNG (APLNG) in October, which is intended for supply to the domestic market.