Santos and Pilbara mining giant Rio Tinto have entered a new gas supply agreement, which will take effect later this year.
Under the agreement, Santos will provide Rio, which operates 16 mines in Western Australia, including the Robe Valley and West Angelas iron ore operations, with up to 15 petajoules of natural gas.
Santos is WA's biggest producer of natural gas and has been operating in the state since its first offshore discovery, in the Carnarvon Basin, in the early 1980s.
“This new gas supply agreement underlines the importance of natural gas for Australian manufacturers and industry,” he said.
“The agreement strengthens our position as WA’s leading supplier of clean, affordable and reliable energy.
“Our disciplined, low-cost operating model has allowed us to manage the challenges of 2020, we are committed to continued investment in exploration and development of new domestic gas supplies in WA to meet the energy needs of local households and businesses for the long term.”
Shares in Santos were down 3 per cent at 12:57pm AEST to trade at $6.83 while Rio shares were down 2 per cent to trade at $117.97.