Search
Gas from the NWSV Karratha plant will be piped to Worsely's operations.

Worsley in two domgas deals

Worsley Alumina has locked in gas supply deals with Chevron and Woodside Petroleum today, as Santos chief executive Kevin Gallagher warns of a looming price spike.

Chevron will supply Worsley Alumina, which is 86 per cent controlled by South32, 60 petajoules of domestic gas over the life of the agreement, while Woodside will allocate 40 petajoules.

The Chevron gas will come from across the company’s portfolio, including Wheatstone, Gorgon and North West Shelf Venture facilities.

Woodside’s gas will also come from Wheatstone and the NWSV, with Pluto an additional source.

LNG exporting businesses such as Woodside and Chevron are required to quarantine off about 15 per cent of gas production for the domestic market, and these deals will form part of that obligation.

Chevron managing director Al Williams said natural gas was a cleaner alternative for local customers, which supported jobs and strengthened the economy.

“As a flexible fuel, natural gas can be used to power Australia's most vital industries and manufacture products essential to modern life,” he said.

“We are working to increase the supply of natural gas into Australia and international energy markets to help realise the objective of affordable solutions to delivering additional energy the world needs while reducing emissions globally.”

Woodside executive vice-president marketing trading and shipping, Reinhardt Matisons, said the company and Chevron had recently started domestic gas production at Wheatstone.

Price warning

Speaking at a Petroleum Club industry dinner last night, Santos chief executive Kevin Gallagher said gas prices were less than half of those on the east coast.

“In the short tem that looks set to continue," he said.

“Gas supply in WA will decline through 2021 in line with reserve depletion at existing facilities.

“As early as 2022, potential gas supply from existing and under construction sources is expected to be insufficient to meet even the low case for forecast gas demand.

“This means there is a supply gap … that is expected to be filled by opportunities that are not yet sanctioned to be developed.”

Mr Gallagher said that, only eight years ago, new domestic gas contracts in WA had been double those of the eastern states.

“If you want to predict the future, history is always a good place to start,” he said.

“Can we afford to simply rely on new LNG projects for domestic gas projects here in the west?”

Add your comment

Share Price

Closing price for the last 90 trading days
Powered by Morningstar ®

BN30 Index

Index = 100 as of 4 Jan 2016
Source: Morningstar

Top 10 Shareholders

Substantial shareholders as published in the annual report.
Powered by Morningstar ®

Total Shareholder Return as at 31/01/20

1 year TSR5 year TSR
60thFortescue Metals Group134%47%
314thMineral Resources11%25%
339thWoodside Petroleum6%6%
553rdSouth32-22%
783rdOM Holdings-65%9%
677 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Powered by Morningstar ®

Share Transactions

18/02/20
$0 Other
18/02/20
$3.6m Issued
18/02/20
$0 Other
Total value as at the date of the transaction
Powered by Morningstar ®

Revenue

1st-Fortescue Metals Group$14,366.2m
2nd-South32$10,711.5m
3rd-Woodside Petroleum$7,536.1m
4th-Mineral Resources$1,520.1m
5th↑OM Holdings$1,512.4m
484 listed resources companies ranked by revenue.
Powered by Morningstar ®