Santos Limited has executed a binding term sheet with the Government of South Australia for the long-term supply of gas to support the transformation of the Whyalla Steelworks into a low-emissions green iron facility, subject to certain conditions.
Under the proposed agreement, Santos will supply 20 petajoules (PJ) of gas per year over a 10-year term, delivered ex-Moomba. Pricing will be indexed with a prepayment structure consistent with industry norms. First gas is scheduled for 1st March 2030, coinciding with the expiry of Santos’ Horizon contract with the GLNG joint venture.
The agreement is expected to support the long-term future of the Moomba Central Area in the Cooper Basin, South Australia, which is operated by Santos.
Santos employs approximately 700 people in Adelaide and a further 400 across Port Bonython, Whyalla and Moomba. In the past year, the company spent more than A$370 million with South Australian businesses, invested A$6 million in sport and community initiatives across the state, and paid about A$60 million in state royalties and taxes.
Managing Director and Chief Executive Officer Kevin Gallagher said the company plays an important role in Adelaide and South Australia’s economy. He said the agreement would secure jobs in Adelaide and the Cooper Basin for at least the next 15 years.
He added that Santos would contribute to South Australia’s broader economic future by supporting the government’s plan for the sale and transformation of the Whyalla Steelworks. Gas supplied under the agreement will enable the deployment of direct reduced iron technology to process local magnetite ore into low-carbon iron, reducing emissions by around 50 percent compared to the former coal-fired blast furnace operations, while helping sustain jobs in Whyalla and the Cooper Basin.
Santos has supplied gas to Whyalla for many years and will work with the state government on its green steel strategy aimed at supporting domestic manufacturing and industrial decarbonisation.
The agreement was enabled by a Conditional Ministerial Exemption under the Gas Market Code, allowing negotiations between the parties. Supply is set to commence on 1st March 2030. The contracted 20PJ per annum represents around 30 per cent of Santos’ current gas production from the Cooper Basin and can be supplied from the Moomba Central Area fields development.
Santos is expected to benefit from a long-term contract with a top-tier counterparty and fixed price indexation, further diversifying its gas sales portfolio and providing a natural hedge against oil-linked pricing exposure. The prepayment structure will support planned investment in infrastructure and upstream optimisation as part of the Moomba Central Optimisation project, aimed at delivering operational efficiencies, higher productivity wells and lower operating costs.
The transaction is subject to the execution of a fully formed gas supply agreement by 30th June 2026, as well as internal and regulatory approvals.
For more information visit www.santos.com
