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Gas sold by the producers will be delivered to the Mount Isa Power Station which will generate power for the mine at Lawn Hill.
Under the new contract the producers will provide the total gas needs for the Century Mine over the next three and a half years from the Cooper Basin. Up until now the group has supplied about 50% of Pasminco's gas requirements since mid 2001on a short term basis.
Pasminco has agreed to purchase up to a total of 15PJ of gas from this week and will continue until the end of 2006.
"This is a good outcome for Cooper Basin gas as it increases the quantity of gas to Pasminco on a firm supply basis for the next three and a half years," said John Ellice-Flint, Santos' managing director.
"The Century Mine is one of the largest zinc mines in the world and Santos is delighted to be associated with such a significant Queensland and Australian resource project."
The Cooper-Eromanga oil and gas basin has been a significant supplier of natural gas to eastern state markets since 1969 and only late last year, AGL signed a $2 billion contract to buy as much as 505PJ of extra Cooper Basin gas, underpinning the future of the region until at least 2015.
The interests of the South West Queensland Gas producers are Santos 60.1%, Delhi (ExxonMobil) 23.2%, Origin Energy 16.5%, Oil Company of Australia 0.2%.
