Crucial gas supply ensures Qenos continues operations

A new six-year ethane gas contract will enable Australia’s sole manufacturer of polyethylene, Qenos, to maintain its operations at Botany Bay in Sydney.

The sales agreement is expected to supply up to 15 petajoules of ethane per annum, 87 petajoules through to 2025. Cooper Basin joint venture (SACB) partners Santos and Beach Energy announced the agreement on Thursday.

Ethane is an essential raw material feedstock used by Qenos for the production of polyethylene, which is used by Australian manufacturers across a range of industries and applications, including consumer and industrial packaging, water conservation, waste management and agriculture.

The ethane required by Qenos is processed via a dedicated facility operated by Santos on behalf of the SACB joint venture at the Moomba Gas Plant, in north-eastern South Australia.

“I am very appreciative of both Santos and Beach Energy for recognising the importance of supplying Qenos as a domestic manufacturer, and the role it plays as a cornerstone of Australia’s $38 billion chemical industry supporting over 200,000 jobs,” Qenos chief executive officer, Steve Bell, said.

“Whilst this extended ethane supply agreement provides the opportunity for us to operate our Botany facility on a more solid footing, this doesn’t mean the East Coast gas problem is solved. The significant challenge still remains for Qenos to also secure the supply of 42 petajoules of natural gas at a sustainable price over the same period to underpin our manufacturing operations in both New South Wales and Victoria.”

Qenos’ Botany site spans 37 hectares in a major chemical and plastics manufacturing area located next to Botany Bay shipping terminal. Qenos is also a supplier of world-class polymers.

“The only way to put downward pressure on gas prices for NSW customers is to develop new gas supplies closer to market. A commercial baker in Sydney pays around $26,400 more every year for gas than a similar business in Brisbane,” Santos managing director and chief executive officer, Kevin Gallagher, said.

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