en.Wedoany.com Reported - Australian energy company Santos has signed a 10-year natural gas supply agreement with the South Australian government, providing 20 PJ (totaling 200 PJ) of domestic gas annually to the Strategic Gas Reserve starting March 1, 2030. This date aligns with the expiration of the Horizon contract between Santos and the GLNG joint venture, with the agreement valid until 2040. The parties reached agreement on key terms on February 20, 2026.
The Gas Sales Agreement (GSA) will support the long-term development of the Central fields near Moomba in South Australia. Santos and its joint venture partner Beach Energy made a final investment decision on the Moomba Central Optimisation (MCO) project in March 2026. The Central fields contain over 50% of the remaining 2P reserves in the Cooper Basin.
The MCO project is expected to unlock the full production capacity of the Central fields, reducing unit production costs and carbon emissions. The prepayment structure of the GSA will directly support Santos' capital expenditure investment in this project, which is planned for delivery within three years.
Santos Managing Director and Chief Executive Officer Kevin Gallagher stated that the agreement helps ensure affordable domestic gas supply for South Australian industry through 2040 and enables Santos to invest in the long-term future of the Cooper Basin. He emphasized that Santos is a significant corporate citizen in Adelaide and South Australia, employing approximately 700 people in Adelaide and another 400 in Port Bonython, Whyalla, and Moomba, and that this agreement helps secure employment in these regions for at least the next 15 years.
The project plans to replace seven aging gas compressor stations with one electric compressor station to relieve upstream infrastructure bottlenecks. The Moomba gas plant will install new inlet compression and additional power generation capacity to receive natural gas and power upstream satellites.
Gallagher noted that the agreement is a positive signal for all South Australian businesses and community partners that Santos works with. In the past year alone, Santos paid over AUD 370 million to local businesses, invested AUD 6 million in South Australian sports and community projects, and paid approximately AUD 60 million in state royalties and taxes. The agreement will support the government's advancement of the South Australian Strategic Gas Reserve plan, which aims to secure the future of South Australian industry and energy security, including the planned sale and transformation of the Whyalla Steelworks.
The project is expected to enable remote operation of the Central fields, supported by the Moomba Operations Center. Gallagher concluded that the agreement demonstrates Santos' ability to partner with customers to provide long-term domestic gas supply at competitive prices while creating value for shareholders. This gas supply agreement was signed just weeks after JERA confirmed receiving its first liquefied natural gas cargo from Santos' offshore project in Australia's Northern Territory.
