Santos, GLNG partners allocate more gas for domestic market

Australian LNG operator Santos and its GLNG partners have agreed to deliver 15 petajoules (PJ) of natural gas from their export portfolio into the Australian east coast domestic market in 2018. 

Fifteen PJ of gas is about 2 percent of expected 2018 domestic demand and enough to cover half of any shortfall that might arise under the ACCC’s high demand case for next year, Santos, that holds a 30 percent interest in GLNG, said on Wednesday.

Origin has agreed to purchase this gas from GLNG for supply to its Australian household, industrial and power generation customers.

The agreement covers a seven-month period from April 2018 to October 2018, coinciding with increased winter demand in southeastern Australian markets.

Santos managing director and CEO Kevin Gallagher said, “as highlighted by the ACCC earlier this month, there is already enough gas supply to more than cover expected domestic demand in 2018.  This additional supply from GLNG is enough to also cover half of any shortfall that might arise under the ACCC’s high demand case for 2018.”

Santos and its GLNG partners are drilling around 250 more wells in 2018 and this means more gas supply for both the domestic gas market and the LNG export markets going forward, according to Gallagher.

When combined with existing agreements signed earlier this year, the latest deal brings GLNG’s domestic contributions to more than 60 PJ over the next two years.