Santos welcomes agreement

SANTOS has welcomed the finalisation of a heads of agreement released by the Australian government yesterday.
The agreement has no adverse impact on Santos or the Gladstone liquefied natural gas (GLNG) project.
According to Santos, the agreement between the Australian government and the east coast LNG exporters ensured that the LNG exporters’ uncontracted gas will first be offered to the domestic market before being offered to international customers.
The LNG exporters have agreed to adhere to the principle that domestic gas customers will not pay more for the LNG exporters’ uncontracted gas than international customers.
The agreement removes sovereign risk by recognising the importance of honouring LNG contracts and will help to maintain Australia’s reputation as a trusted and reliable LNG exporter.
Each of the LNG exporters has provided a plan to address a forecast potential domestic gas shortfall risk in 2023 and the Government is satisfied those plans are sufficient to mitigate the risk.
For the last two years, unplanned high demand in winter has resulted in domestic gas price spikes for periods of around 65 days.
As a result, Santos’ GLNG project has provided a seasonal shaping plan for next year that ensures LNG contract obligations can be met but also results in more domestic gas being available.