Gold Fields, Santos in gas supply deal

Santos has entered into a new gas supply agreement with Johannesburg-listed Gold Fields for three of its gold mines in Western Australia.

Adelaide-based Santos will supply nearly 5.5 petajoules of natural gas from its Varanus Island gas plant to Gold Fields' Agnew, Granny Smith and St Ives mines for three years, beginning next month.

Managing director Kevin Gallagher said the company was pleased to continue its relationship with Gold Fields.

“We are delighted Gold Fields has come back to Santos after a short hiatus, reinforcing our position as Western Australia’s biggest supplier of natural gas to the local market,” he said.

Santos supplies around 40 per cent of WA’s total domestic demand, Mr Gallagher said.

“In these challenging economic times, we are focussed on ensuring local gas prices remain competitive for Western Australian businesses over the long term.”

Shares in Santos closed up 5 per cent to trade at $5.45.