Santos closes WA gas plant amid supply concerns

Santos will soon close its Devil Creek gas facility, which supplied 11 percent of WA’s market last year, amid growing concerns about the volume and reliability of the state’s gas supply.

Significant problems have hit three major plants supplying WA with gas over the past seven weeks, causing the industry to cut production and buy expensive diesel instead of gas to generate electricity.

Santos has been processing offshore gas at Devil Creek since 2012

Santos has been processing offshore gas at Devil Creek since 2012Credit:santos

In December, the Australian Energy Market Operator’s annual official forecast for the gas market in WA forecast a tight gas market this decade and significant shortages beyond 2030.

Santos declined to comment on the Devil Creek closure, which precludes disclosing expected capacity to AEMO for June 1.

The Adelaide-based company, which is the largest supplier of gas to WA, announced in November that the Reindeer offshore field, which supplies Devil Creek, would run out of gas sometime in 2023, but did not say when that would be .

Two years ago, Santos wrote off $98 million ($141 million) of Reindeer’s value on the expectation that gas production would fall sooner than expected.

The Devil Creek facility is currently operating at reduced capacity due to an unspecified issue. Santos plans to bring it back to full capacity on Jan. 26, according to the AEMO Gas Bulletin Board.

The larger gas plant on Santos’ Varanus Island has been operating at a fraction of its usual capacity since November, when gas leaked from an underwater pipeline. Full production is expected to be rescued on January 27th.

The summer gas shortage was at its worst last week, when Chevron’s domestic gas plant in Wheatstone was also out of action. Production has resumed. Santos closes WA gas plant amid supply concerns

Brian Lowry

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