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Moomba Incident - Latest Update

Moomba gas supply

Santos Limited says it plans to move by tomorrow into the Stage Two of its restoration of gas supplies from the Moomba processing plant in central Australia, damaged by fire last Thursday.

This will see approximately 150 terajoules per day delivered into the pipeline grid from tomorrow.

The additional supplies will come from raw gas extracted from field wells around Moomba and which is able to be processed through those parts of the plant not affected by the fire.

These higher volumes will represent about 40% of the gas supplied into the Adelaide and Sydney pipeline networks from Moomba during normal demand at this time.

“The plant’s output is expected to then stabilise around a 150 TJ/d level without further increases until Moomba is able to implement further stages of operation but these will take some weeks,” Santos Managing Director, Mr John Ellice-Flint, said today.

The Company also announced today that under Stage One of the supply recovery program, processed gas stored underground at Moomba and now being fed into the system, had stabilised at 120 TJ/d.

Government investigators left the site today but Santos says it is still likely to be some days before unrestricted access to the site is possible.

Not until then will it be possible to commence the structural cleanup work at the incident site.

The Company announced yesterday initial investigations of the incident pointed towards an unforseen failure of a heat exchanger inlet nozzle as the source of the hydrocarbon release.

This equipment is in an area used to cool gas to low temperatures at which liquid gas products such as butane and propane can be extracted.

Santos expects to have a clearer picture by the end of this week of the extent of damage from the fire.

“Santos has already commenced some procurement ahead of that final damage assessment being available so as to accelerate the rehabilitation of the damaged area in the shortest possible time,” Mr Ellice-Flint said.

“Once we have a full picture, however, we will be in much better shape to determine the engineering and procurement challenges to achieve a safe return to normal operations,” he said.

“The performance of our employees on site has been exceptional under some extraordinary circumstances and has been fundamental in moving quickly to restore gas supply after the emergency response period.

“The pace at which we can maximise supply will improve as access to the whole site increases.”


Santos and its joint venture partners advised earlier today of the financial impact of the incident.

Operating cash flow has also been growing strongly over past years. Santos balance sheet remains strong, with gearing around 25%. The incident will not have any impact on the Company’s 2003 results or dividend. The reduction of $35-40 million in operating cash flow expected to result from the Moomba incident, in 2004, is also unlikely to significantly change the outlook for dividends.