Santos seals ten-year gas supply deal

June 29, 2026, by Melisa Cavcic

Australia’s energy player Santos has ironed out a decade-long gas supply agreement with the South Australian government.

Santos has executed a gas sale agreement (GSA) with the South Australian government to supply 20 PJ per annum, or 200 PJ in total, of domestic gas for the strategic gas reserve over ten years from March 1, 2030, coinciding with the expiry of the firm’s Horizon contract with the GLNG joint venture. This deal, which is valid to 2040, follows the agreement of key terms on February 20, 2026.

This GSA is interpreted to support the long-term future of the Central fields near Moomba in South Australia, which contain more than 50% of the remaining 2P reserves in the Cooper Basin after the Australian giant and its joint venture partner, Beach Energy, took a final investment decision (FID) in March 2026 to proceed with the Moomba Central Optimisation (MCO) project.

The development is anticipated to unlock the full productivity of the Central fields and reduce unit production cost and carbon emissions. The prepayment structure of the GSA will directly support Santos’ capex investment in the MCO project, which is planned to be delivered over three years.

Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, highlighted: “This agreement helps secure affordable domestic gas supply for South Australian industry to 2040 and enables Santos to invest in the long-term future of the Cooper Basin.

“Santos is an important corporate citizen of Adelaide and South Australia, employing around 700 people in Adelaide and another 400 in Port Bonython, Whyalla and Moomba. This agreement helps secure jobs in Adelaide and regional South Australia for at least the next 15 years.”

The project is designed to replace seven ageing gas-driven compressor stations with one electric-driven compressor station that will debottleneck upstream infrastructure. The new inlet compression and additional power generation capacity at the Moomba gas plant will be installed to receive gas and power the upstream satellite.

Gallagher underlined: “It is good news for all the South Australian businesses and community partners we work with. Last year alone, Santos spent more than A$370 million with local businesses, invested A$6 million in South Australian sport and community initiatives, and paid about A$60 million in state royalties and taxes.

“This agreement will support the government’s visionary South Australian Strategic Gas Reserve that will help ensure South Australia’s industrial future and energy security, including the planned sale and transformation of the Whyalla Steelworks.”

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As a result, the development is expected to enable the Central fields to be operated remotely, with operations support provided from the Moomba operating centre.

Gallagher concluded: “Importantly, this agreement demonstrates Santos’ ability to work with customers to deliver long-term domestic gas supply at competitive prices and also create value for our shareholders.”

The signing of the gas supply deal comes weeks after JERA confirmed delivery of its first liquefied natural gas (LNG) cargo from Santos’ project offshore Australia’s Northern Territory.