Australian LNG player Santos said it has signed a new domestic natural gas supply deal with a unit of Norwegian chemical company Yara.
Under the deal with Yara Pilbara Fertilisers, Santos will supply natural gas to Yara’s liquid ammonia plant on the Burrup Peninsula in Western Australia.
The plant is one of the world’s largest ammonia production facilities, with a production capability of about 850,000 metric tons annually, according to Yara’s website.
Santos said in a statement it would deliver over 120 petajoules of natural gas over five years, starting at the completion of its current agreement with Yara in 2023.
In addition to the gas supply agreement, Santos and Yara will also work together to explore decarbonization opportunities in Western Australia, including carbon capture and storage.
Kevin Gallagher, CEO of Santos, said the firm continues to support Western Australian industry through the delivery of “competitively priced” domestic natural gas.
He said the deal reinforces the company’s position as WA’s biggest supplier of domestic gas to the local market.
“Santos supplies around 40 percent of the State’s total domestic demand, and we are committed to ongoing investment in developing new gas supplies in WA,” Gallagher said.
Santos is now a larger company following the completion of its merger with PNG-focused Oil Search in December last year.
The company’s core business includes Darwin LNG and Barossa project, as well as the PNG LNG and GLNG facilities.