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Summary

East Spar Gas to Supply Kwinana Ammonia Project

East Spar Gas to Supply Kwinana Ammonia Project

Santos today announced that the participants in the East Spar Joint Venture (ESJV) had concluded an agreement for the supply of gas to Wesfarmers CSBP Limited (CSBP) for its new Kwinana Ammonia Project. The project is for a 650 tonne per day ammonia plant being constructed at Kwinana costing approximately $150 million, which will replace the existing smaller plant currently in operation.

The parties have signed a Gas Sales Agreement under which the ESJV will supply natural gas to CSBP at a rate of 22 terajoules per day, commencing in mid 1999. Natural gas will be used by CSBP as a feedstock and fuel source for the production of ammonia.

The gas supplied to CSBP will be transported from Varanus Island to the Dampier – Bunbury Natural Gas Pipeline through a second gas pipeline. Agreement has been reached for the new pipeline to be funded by the ESJV and the Harriet Joint Venture.

Commenting on the signing, the Managing Director of Santos, Mr Ross Adler said:

“The contract with CSBP represents the fourth gas sale agreement reached since we acquired an additional 30% interest in East Spar from WMC in 1997.

This continuation in activity reaffirms Santos decision to increase its presence in the fast growing Western Australian natural gas industry.

The new pipeline will transport natural gas under existing gas sales contracts, but will also provide the transportation infrastructure for future gas supply opportunities.”

The participants in the ESJV are as follows:

Santos (BOL) Pty Ltd 45%
Apache Oil Australia Pty Ltd 20%
Apache East Spar Pty Ltd 25%
Hardy Petroleum Limited 10%