Australian independent Santos has agreed binding terms to extend its current gas supply agreement with Australian building materials firm Brickworks to supply 35PJ (935mn m³) with an 11-year deal starting in January 2025 and the potential for further extensions.
Santos did not disclose the terms of the pricing of the gas contract, except that it will be consumer price index linked over the duration of the contract, said Santos chief executive Kevin Gallagher.
The deal provides critical energy security to Brickworks and the broader construction industry because it has no technically or economically feasible option on the horizon for electrification or conversion to zero emissions fuels such as hydrogen, so that without gas these products would be unable to be manufactured in Australia, Gallagher said.
Santos and Brickworks signed an agreement in 2019 for the supply of 3PJ/yr from the Narrabri gas project in the onshore Gunnedah basin in northern New South Wales for seven years from 2025. Both firms also signed a gas supply deal in 2018 with Santos to supply Brickworks with 15PJ over a five-year period.
Santos has said since 2020 that it will make a final investment decision on Narrabri in the first half of 2023.
