October 8, 2008
Santos Secures Gas Supply Contract From Moly Metals
Santos, engaged in the production, transportation and marketing of hydrocarbons, has secured a new gas supply contract with Moly Metals Australia for its Spinifex Ridge molybdenum and copper mine located in the Pilbara region of Western Australia.
Under the contract, Santos will supply approximately 33 petajoules of gas over six years commencing in mid-2010. The gas will be supplied from the offshore John Brookes gas field, processed at the East Spar gas processing facilities on the Varanus Island, and transported to the mine through the Dampier Bunbury pipeline.Santos's ability to deliver on this contract is driven by an investment of approximately A$45 million during 2008 and 2009 to increase the gas pipeline capacity from the East Spar Joint Venture facilities located on the Varanus Island. Assuming a future oil price of $90 per barrel, the expected revenue derived from the contract will be approximately $380 million.
David Knox, CEO of Santos, said: "Santos has again demonstrated a willingness to invest significant capital to ensure that the expanding energy demands of the Western Australia domestic gas market are met."