Santos gas leak cuts WA supplies
Santos says it’s had a gas leak at its offshore field in Western Australia and supplies have been cut from the Varanus Island processing facility.
West Australian gas users face a supply crunch after Santos suffered a leak at an offshore platform that props up the state’s main processing facility.
Santos’ John Brookes platform will be shut down for up to six weeks after a “small” gas leak was discovered on the main pipeline to Varanus Island.
“Santos is working with customers and other parties to manage gas supply arrangements while the leak is repaired. At this stage, it is expected repairs will take approximately four to six weeks to return to full production,” it said in a statement.
“Varanus Island will continue producing at reduced rates and no changes to Santos’ previously communicated production market guidance is anticipated.”
Varanus Island, operated by Santos, is a major source of gas supply to WA‘s mining and industrial producers.
WA Energy Minister Bill Johnston said the government was “working with the commonwealth to understand the implications of the leak at the John Brookes platform 40km west northwest of Barrow Island.”
“But at this time it is not expected to have an impact on power supply to the South West Interconnected System or gas supply to homes and businesses.”
An Alcoa spokeswoman said production at its WA operations had not been impacted, but it was continuing to monitor the situation. Fortescue Metals was also not thought to have experienced any issues. The facility suffered a major explosion in 2008 under former owners Apache that wiped out a third of the state‘s gas supply for several months.
Separately, Santos struck a long-term gas deal with Brickworks to supply the manufacturer’s east coast operations until 2036. Brickworks has a wholesale gas supply agreement in place with Santos that extends to December 2024.
The company said on Tuesday the new agreement would start in January 2025 and cover supply to Brickworks’ east coast operations for an additional 11 years, with the potential for extensions options.
Brickworks managing director Lindsay Partridge said the company produced about 500 million bricks each year on the east coast, or enough to build approximately 50,000 houses.
“Securing reliable and cost-effective gas is not only critical for our operations, but will also provide relief for young Australians building homes and dealing with rising construction costs across the sector,” he said.
Mr Partridge, whose bricks and building materials maker Brickworks relies on gas to fire its network of kilns across Australia, has said the switch to renewables was a long-term process that would take decades of methodical planning but right now heavy industry needed large-scale, affordable and reliable energy.
Brickworks has previously agreed to buy up to 3 petajoules annually of gas for seven years from 2025 from Narrabri under the non-binding deal signed with Santos. Narrabri could supply half of NSW’s gas needs but the project has been delayed for years and a final investment decision is only expected in 2023 following a 12-18 month appraisal program.