PERTH (miningweekly.com) – Oil and gas producer Santos reported on Monday that it had signed an agreement to redirect gas to the Pelican Point power station, to support South Australia’s energy needs.
Starting in January next year, Santos will supply 15 PJ of electricity to the power station, through a mix of gas from the Gladstone liquefied natural gas (LNG) project and the company’s portfolio gas.
MD and CEO Kevin Gallagher said that energy security for South Australia was a priority, and the agreement with ENGIE demonstrated the company’s willingness to work with its partners to reach a positive outcome.
Santos said it would announce further domestic supply contracts in the coming months, as part of its efforts to support the federal government’s efforts to deliver affordable and reliable energy to the country.
The Australian Petroleum Production & Exploration Association (Appea) on Monday said that Santos’s agreement with ENGIE, along with recent gas supply announcements by Shell Australia and Origin Energy, showed that the industry was meeting the needs of its domestic customers.
“This ENGIE agreement, coupled with other actions the industry has taken since March, shows gas producers are delivering,” Appea CEO Dr Malcolm Roberts said.
He reiterated that the only sustainable way to meet gas demands for exports, domestic manufacturing, and energy generation was to increase supply.
“This is where all governments should be focused. Some states need to decide whether they wish to be part of the problem or part of the solution.
“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.”
Roberts said that the Santos announcement provided further evidence that market interventions, such as the Australian Domestic Gas Security Mechanism (ADGSM), were unlikely to be required.
The ADGSM was introduced in April this year and will give the government the power to restrict LNG exports in domestic shortfall years.