Under the contract Santos (45%) and Apache (55% and operator) will supply Newcrest with 120 petajoules (PJ) of gas over 15 years from the John Brookes field.
This is the first major gas contract for John Brookes following the approval of the $A220 million (Santos estimate) development of the field.
The John Brookes field is located in exploration permit WA 214-P, in the Carnarvon Basin, offshore Western Australia.
The sales contract will see the field provide a maximum of 25 terajoules (TJ) per day to Newcrest for power generation at the Telfer gold mine, in the Pilbara region of Western Australia.
The contract will commence no later than December 2004 and will support both the open cut and underground operations phases of the Telfer mine.
The contract is subject to the execution of gas transport agreements, completion of metering facilities and obtaining all relevant permits.
The contracted gas will initially be supplied from the nearby East Spar gas field until the John Brookes field commences production in mid 2005.
The John Brookes field was discovered in 1998 with the drilling of the John Brookes 1 exploration well and successfully appraised by the Thomas Bright 1 and 2 wells during 2003.
Following the approval by the joint venture partners, field development is proceeding to supplement East Spar gas production, as the field moves into decline, and to meet the Newcrest contract.
Gas from the new development will be processed through the East Spar Joint Venture (Santos 45% and Apache 55% and operator) facilities located on the nearby Varanus Island in the Carnarvon Basin.
"It is very pleasing to capture a new contract in the Western Australian gas market which will further the development of the Varanus Island gas hub", said Santos' Managing Director, John Ellice-Flint.
"The Telfer mine is one of the key resource projects in the Pilbara area and Santos is delighted to be a part of the expansion of this important development," he said.
Interests in the John Brookes Joint Venture are:
Apache Northwest Pty Ltd (operator) 55%
Santos (BOL) Pty Ltd 45%
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