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Santos has entered a contract to supply natural gas to Australia’s biggest alumina producer, Alcoa of Australia Limited.

The contract commences in 2018 and will see Santos supply 82PJ of gas to Alcoa from the John Brookes field in the offshore Carnarvon Basin, over an initial contract term of five years. The contract allows for two five year extension options by mutual agreement.

Santos General Manager WA & NT, Brett Woods, said the contract with Alcoa was the start of what he hoped would be a long and mutually beneficial partnership.

“This is a significant contract for us, not only in terms of its value but also in its tie-up with WA’s biggest buyer of natural gas,” he said.

“I am confident it will set the foundation for a long, fruitful association between the two companies allowing for other gas supply opportunities to be explored.”

“This contract also consolidates our place as one of the biggest suppliers of domestic gas in WA, a market share we want to grow.”

APPEA Chief Operating Officer Western Region Stedman Ellis said the contract was evidence of WA’s increasingly mature domestic gas market and illustrates that a gas reservation policy is not necessary.

“The Alcoa deal follows last year’s announcement by FMG, another Alliance member, that it is converting its operations from diesel power to gas, an investment that would not be contemplated in a constrained market.”

Mr Ellis said the health of the domestic gas market was again highlighted by the Independent Market Operator’s annual Gas Statement of Opportunities released in December, which forecast an abundant supply of gas for export and domestic needs over the next decade.

 

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