Going up: gas processing facilities on Varanus Island (above) are being upgraded to receive gas from the John Brookes field
Santos closes six-year gas deal
Santos is primed to supply gas from the offshore John Brookes field to Moly Mines for their Spinifex Ridge mining project in Western Australia’s Pilbara region over a six-year period starting in mid-2010.
The Australian outfit will supply 33 petajoules (8.8 billion cubic metres) of gas, which will be processed at the East Spar gas processing facilities on Varanus Island and transported to the mine through the Dampier Bunbury pipeline.
Santos said its ability to deliver on the contract is driven by an investment of A$45 million (US$61 million) over 2008 and 2009 to increase the gas pipeline capacity from the East Spar joint venture facilities on Varanus Island.
Assuming a future oil price of US$90 per barrel, the expected revenue derived from the deal will be about US$380 million.