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Santos, ENGIE ink gas deal

By  Monday, 14 August 2017 21:06
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Australian energy company Santos announced it has signed an agreement with ENGIE in Australia for the supply of gas to the Pelican Point Power Station that will help support South Australia’s energy needs.

Starting in January 2018, the contract is for 15PJ, which will be sourced from the Gladstone Liquefied Natural Gas (GLNG) project and Santos’ gas portfolio.

ENGIE is a French utility company operating about 2000 MW of renewable, gas-fired and brown coal-fired generating plants in Victoria, Western Australia, and South Australia.

Santos chief executive Kevin Gallagher said energy security for South Australia was a priority and the agreement demonstrated the company’s willingness to work with its GLNG partners, including Petronas, Total, and KOGAS, to reach a positive outcome.

“The Australian Energy Market Operator in its report published in June 2017 identified the resumption to full service of Pelican Point Power Station as critical to supporting South Australia’s electricity needs,” he 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.”

In Q2 2017, Santos produced 14.7 MMboe, in line with the previous quarter as higher GLNG equity gas and Western Australia domestic gas production was offset by slightly lower Cooper basin gas production

Sales volumes were up 16% to 21.5 MMboe and sales revenues up 12% to US$769 million primarily due to higher LNG prices and the timing of liftings. As a result, the firm increased its production and sales volume guidance for 2017 to 57-60 MMboe and 75-80 MMboe respectively.

In June, Santos announced the launch of a new strategic partnership with existing Chinese investors ENN Group and Hony Capital, who hold a combined 15.1% of Santos shares. The agreement will see the three companies jointly invest in gas exploration and LNG production in Australia and Papua New Guinea (PNG).

Operated by ExxonMobil, in PNG Santos is a 13.5% equity holder in the US$19 billion PNG LNG project - an integrated development currently supplying LNG to Asian customers. In June, PNG LNG operated at an annualized rate of 8.6 MTPA, the highest monthly rate since start-up in 2014. 

Image: Santos workers at GLNG / Santos

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