Santos has agreed to supply 20 petajoules (PJ) a year of natural gas to the Whyalla Steelworks to help in its transition into a low-emissions green iron facility.
Santos signed a binding term sheet with the South Australian government to supply natural gas to Whyalla Steelworks for 10 years. The prospective deal would use indexed pricing with a prepayment arrangement, allowing Santos to diversify its gas sales portfolio and providing a natural hedge against oil linked pricing elsewhere. The prepayment structure will assist Santos to invest in infrastructure and upstream optimisation.
The gas company said the agreement will support the long-term future of the Moomba central area of the Cooper Basin in South Australia.
Santos CEO Kevin Gallagher said the agreement secures jobs in Adelaide and the Cooper Basin for at least the next 15 years.
“Santos gas will be used to enable Whyalla to deploy direct reduced iron technology that can process local magnetite ore to produce low-carbon iron. This will keep jobs in Whyalla and the Cooper Basin, and reduce emissions by approximately 50 per cent compared to the former coal-fired blast furnace operations.
“Our agreement today is great news for the Upper Spencer Gulf and South Australia because industries like the Whyalla Steelworks rely on affordable energy combined with decarbonisation to grow into the future – keeping jobs, skills and business opportunities here in the region to support vibrant local communities for decades to come.”
Santos will start supplying gas on March 1, 2030. The annual contract quantity of 20 PJ is about 30 per cent of Santos’ current production from the Cooper Basin.
The South Australian government aims to transform Whyalla into a green plant. The government placed the plant’s former owner GFG Alliance under administration in 2025.
Last week, the South Australian government announced the start of geotechnical drilling on an expansion project to secure long-term magnetite supply for the steelworks.
The Magnetite Expansion Project in the Middleback Ranges aims to produce up to 2.5 million tonnes of magnetite per year.