Extension of Ethane Sales Contract for the Cooper Basin 9^th Dec 2003

Santos Limited and the other South Australian Cooper Basin Gas Producers (Producers) announce today that they have secured an extension of their existing long-term ethane supply contract with Qenos Pty Ltd.The extended contract means that Cooper Basin ethane supply to Qenos will continue to the beginning of 2010, with potential to further extend the contract.

Qenos has agreed to purchase up to 65 petajoules (PJ) of ethane over the extended period.

The price paid by Qenos to the Producers for ethane is dependent upon the West Texas Intermediate crude oil price. Depending on the oil price and the actual level of ethane supplied by the Producers, the contract extension could generate additional revenue of between $208 million and $280 million in todays dollars.

The contract extension is an excellent outcome for the Cooper Basin as it secures another long-term sales commitment for the Producers, said Mr John Ellice-Flint, Santos Managing Director.

Qenos is an important and valued customer and we are pleased to conclude this mutually beneficial deal which has the potential to be extended even further in the longer term.

The Producers signed the original contract with Qenos in 1994 agreeing to supply approximately 156 PJ of ethane. To meet this contract the Producers constructed a new ethane processing plant at Moomba. Ethane is transported via a dedicated ethane pipeline from Moomba to the Qenos plant at Botany, New South Wales.

Qenos is Australias leading manufacturer of polyethylene with operations in Altona, Victoria and Botany, New South Wales.

Ethane is the key feedstock for the production of ethylene, which is used to manufacture high value added polyethylene found in a wide variety of plastic products used in domestic and commercial applications.

The interests of the South Australian Cooper Basin Gas Producers are: