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Summary

Major new gas contracts for the Cooper Basin

Santos Limited and the other Cooper Basin Producers have signed two new long-term contracts with the Australian Gas Light Company (AGL) to supply gas from the Cooper Basin.

The new contracts are among the largest sales agreements for Cooper Basin gas since the early 1970s.

AGL has agreed to purchase up to a total of 505 petajoules of additional Cooper Basin gas, with supply commencing in 2003 and extending through to 2016.

This deal is worth in excess of $2 billion to the Cooper Basin producers for the gas and associated liquids and condensates.

Separate sales gas contracts have been signed between AGL and the South Australian Gas Producers and AGL and the South West Queensland Gas Producers, supplementing the volumes currently being supplied under the existing contract, which expires in 2006.

This is a significant new achievement for Santos and its joint venture partners, delivering gas under long-term contracts into the eastern Australia energy market, said Mr John Ellice-Flint, Santos Managing Director.

Importantly, this agreement recognises the security and reliability of supply of gas from the Cooper Basin. It underpins the gas volumes needed by AGL to compete in the national energy market, Mr Ellice-Flint said.

For Santos, the contracts are commercially favourable and acknowledge the Cooper Basins security and reliability as a long-term gas supplier to the Australian domestic market.

Santos, as the operator of the Cooper Basin, has had a 31 year commercial relationship with AGL, which we understand to be the longest commercial agreement in the Australian energy sector.

These new contracts extend the relationship to 45 years.

As well as supplying New South Wales, the Cooper Basin supplies gas to customers in South Australia and Queensland under current contracts that extend to 2014.

The interests in the South Australian Gas Producers and the South West Queensland Gas Producers are:

South Australia Queensland

Santos 59.8% 60.1%
Delhi (ExxonMobil) 20.2% 23.2%
Origin Energy 13.2% 16.7%
Novus Petroleum 4.75%
Basin Oil (OMV) 2.1%

Santos is a major Australian oil and gas exploration and production company with interests in all Australian hydrocarbon provinces. Santos also operates in the USA, Indonesia and PNG.