Oil and gas producer Santos has announced the signing of an agreement to supply ENGIE with up to 20 petajoules of natural gas per year, sourced from the Narrabri project in New South Wales. This gas is entirely designated for the Australian domestic market, as per the operator’s commitment. The agreement remains subject to a final investment decision expected from Santos by the end of the year, as well as the conclusion of contractual discussions.
ENGIE strengthens its position in the Australian gas market
ENGIE, a Paris-registered company, operates various assets in Australia including wind farms, large-scale battery systems, and gas-fired power plants. The company also provides energy services to commercial and industrial clients across the country. This new agreement is part of a supply diversification strategy to meet the growing gas demand on the east coast.
The Narrabri project represents a total investment of $2.43bn according to Santos. The company has not yet announced a precise production start date, with commercial terms and pricing still to be finalised. All supplies stipulated in the agreement will depend on confirmation of the investment.
The Narrabri project aimed at easing energy supply
Earlier this year, Santos received approval from a tribunal to advance the Narrabri development. The project is presented as a potential solution to constraints affecting gas supply security on Australia’s east coast. The entire output from the site must be reserved for the domestic market, in accordance with contractual commitments.
The finalisation of the contract with ENGIE will depend on the completion of several regulatory and operational conditions. Santos has confirmed it is targeting a final investment decision by the end of the year, while continuing discussions with ENGIE and relevant authorities.
ENGIE continues to adapt its local supply portfolio to meet the expectations of commercial and industrial clients amid strong demand in the Australian market.
