Australian LNG operator Santos has entered into a new gas supply agreement with Visy to supply wholesale gas for its New South Wales operations.
The agreement starts on 1 January 2019 and was awarded following a competitive process, according to a Santos statement released on Monday.
Santos Managing Director and CEO Kevin Gallagher said in the statement that “Santos is committed to working with Australian industry to deliver competitively priced domestic gas.”
“We’re drilling about 87 wells in the Cooper Basin this year – more wells in a single year since 2014. We’ve arrested production decline in the Cooper and production is actually growing again, which is great news for the east coast gas market,” he said.
Gallagher added that the company was also drilling a record 300 GLNG wells in Queensland.
“Since 2015, we’ve reduced our completed well costs by 50 percent in the Cooper Basin and connected well costs by a phenomenal 84 percent in Queensland, locking in our position as Australia’s lowest cost onshore gas developer,” Gallagher said.
He said that “drilling more wells and lowering production costs – extracting more gas for less money – is the best way to keep downward pressure on gas prices.”
Santos is on track to supply about 70 PJ of gas to the east coast market in 2018, which is almost 13 percent of expected demand this year, according to Gallagher.