Santos has executed a long-term Gas Sale Agreement (GSA) with the South Australian Government to supply 200 petajoules (PJ) of natural gas over a decade beginning in 2030, cementing a key domestic supply arrangement that underpins the state's energy security strategy.

Under the agreement, Santos will deliver 20 PJ of gas annually from March 1, 2030, through February 2040, with supply delivered ex-Moomba. The contract features indexed pricing and a prepayment structure, with first gas scheduled to coincide with the expiration of Santos' Horizon contract with the GLNG joint venture.

The deal provides a cornerstone market for gas from the Cooper Basin's Central Fields, which contain more than half of the basin's remaining proved and probable (2P) reserves. It also supports the recently approved Moomba Central Optimisation (MCO) project, in which Santos and joint venture partner Beach Energy reached a final investment decision in March 2026.

The MCO project is designed to modernize production infrastructure by replacing seven aging gas-driven compressor stations with a single electric-driven compressor station, while adding new inlet compression and power generation capacity at the Moomba Gas Plant. Santos said the upgrades will increase productivity, lower operating costs and reduce carbon emissions, while enabling more remote operations.

The agreement's prepayment mechanism will directly support capital investment in the three-year MCO development program.

Chief Executive Officer Kevin Gallagher said the contract secures long-term domestic gas supply for South Australian industry while providing certainty for continued investment in the Cooper Basin.

The agreement also reinforces the South Australian Government's Strategic Gas Reserve initiative, which is intended to safeguard domestic supply and support industrial development, including the planned transformation of the Whyalla Steelworks. Santos said the deal will help sustain employment across its South Australian operations and strengthen long-term demand for Cooper Basin production as Australia continues to balance export commitments with domestic gas security.

By Charles Kennedy for Oilprice.com

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