Santos has entered into a long-term agreement to supply natural gas to New Century Resources Limited.
Under the gas supply agreement, Santos will provide around 9PJ of portfolio gas worth $100 million in four years, to generate electricity for New Century’s zinc mine near Mt Isa.
According to New Century Resources, there was strong participation from gas suppliers and traders in what was a highly-competitive tender process.
“Santos is delighted to have been selected to supply gas for New Century’s world class Century Zinc Mine and we’re looking forward to a long-term cooperative relationship with the company,” Santos executive vice president marketing and trading Phil Byrne said.
“The gas sales agreement we’ve reached is innovative in both its flexibility and pricing, making it commercially attractive for both parties.
“Santos is absolutely committed to working in partnership with Australian industry to deliver competitively-priced domestic gas and this is a great example of that commitment.
“Access to new and existing supply sources in Queensland as well as new sources in New South Wales and the Northern Territory is critically important to enable us to continue to deliver competitive gas for Australian industry on the east coast as mature fields decline.”
Minister for Natural Resources, Mines and Energy Dr Anthony Lynham said the contract would generate 240 jobs and bring further certainty to Mount Isa’s resources industry.
“We know that gas supply is a critical factor when businesses make decisions about when and where they invest, expand and create jobs,” Dr Lynham said.
“This investment in our regions, which is worth in the order of $100 million, is evidence that Queensland has the right policy settings to drive investment to our regions.
“The agreement with Santos means that from July, New Century will have enough electricity to produce half a million tons of zinc concentrate annually from its industry leading economic rehabilitation project.”
When combined with existing agreements announced in 2017 and 2018, the deal brings Santos’ total 2018 contribution to the east coast domestic gas market to around 70PJ, which is 11 per cent of the ACCC’s expected demand for 2018.