Santos (ASX:STO) and Brickworks (ASX:BKW) extend gas supply deal for 11 years

Follow us on Google News:
 Santos (ASX:STO) and Brickworks (ASX:BKW) extend gas supply deal for 11 years
Image source: © Curraheeshutter | Megapixl.com

Highlights:

  • Santos has agreed binding terms to extend gas supply agreement with Brickworks for additional 11 years.
  • The agreement covers the east coast operations of Brickworks.
  • Under the contract, around 35 petajoules of natural gas will be supplied to Brickworks.

Australian energy company Santos Limited (ASX:STO) on Tuesday (29 November 2022) shared via an ASX filing that the existing wholesale gas sale agreement with Brickworks Limited (ASX:BKW) has been extended for another 11 years under binding terms. The new agreement will commence from January 2025 and has the potential to extend it further.

Brickworks is a materials company which is engaged in building products, investments and land and development.

Details of the extended gas supply agreement

The agreement offers the security of gas supply to Brickworks’ east coast operations and will support Santos’ investment in gas supply in the east coast market.

Kevin Gallagher, chief executive officer and managing director, Santos, stated that under the agreement, the company would supply around 35 petajoules of natural gas at stable, competitive, CPI-linked prices to Brickworks.

Gallagher said,

Gallagher stated that Brickworks and Santos share an ambition of decarbonisation and intend to work together to explore net-zero energy transition opportunities, such as carbon storage and capture and post-combustion capture.

What else?

Today, Santos informed the market about the temporary shutdown of the John Brookes platform. Considering the existing situation, the company expects that repair can take around four to six weeks to allow the platform to return to full production.

According to ASX announcement, a small gas leak was identified during the routine activities on the un-staffed facility. After the observation of the leak, the pipeline and the platform were depressurised and shut down on an immediate basis, and all personnel were demobilised, said Santos.

As reported, all the relevant regulatory bodies have been informed about the event, and the company is working with its customers to manage the gas supply arrangements until the repair work is completed.

Varanus Island will continue production at a lesser rate. Also, Santos said that no changes are expected in its production market guidance.

Share performance of Santos and Brickworks

Santos shares were spotted trading 1.10% lower at AU$7.17 per share at 11:42 AM AEDT with a market capitalisation of AU$24.13 billion. Brickworks’ share price surged by 1.69% to AU$22.91 apiece around the same time, with a market capitalisation of AU$3.43 billion.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK