Under the terms of the five-year agreement, Santos will supply 82PJ of gas from the John Brookes field in the offshore Carnarvon Basin to the country’s biggest alumina producer.
According to the news release by Alcoa, the deal begins in 2018 and is set to meet 18% of Alcoa’s WA gas requirements.
“We hope this agreement will lead to other gas supply opportunities,” said Alcoa of Australia Managing Director, Alan Cransberg.
“We rely on long-term competitively-priced gas supplies to refine alumina from bauxite in Western Australia, creating thousands of jobs and helping drive the local economy. Our key long-term contracts roll off in 2018-2020 and we are working to secure replacement contracts. This agreement with Santos is encouraging, meeting 18% of our needs.”
Alcoa is the state’s single largest user of natural gas, consuming nearly 25% of the state’s total domestic gas supply.
“This is a significant contract for us, not only in terms of its value but also in its tie-up with WA’s biggest buyer of natural gas,” said Santos General Manager WA&NT, Brett Woods in a media release.
“I am confident it will set the foundation for a long, fruitful association between the two companies allowing for other gas supply opportunities to be explored. This contract also consolidates our place as one of the biggest suppliers of domestic gas in WA, a market share we want to grow.”