Australian LNG exporter Santos will proceed with the development of the $4,7 billion Barossa project, located offshore the Northern Territory.
Barossa is an offshore gas and light condensate project being progressed by the Barossa Joint Venture comprising Santos and SK E&S Australia Pty Ltd.
The project – which represents the biggest investment in Australia’s oil and gas sector since 2012 –proposes to provide a new source of gas to the existing Darwin LNG facility once current reserves from the Santos-operated Bayu-Undan field in the Timor Sea have been depleted.
In addition to announcing a final investment decision for Barossa, Santos said it would kick-start the $786 million investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for around 20 years.
The Barossa development will comprise a floating production, storage and offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline.
Santos Managing Director and CE) Kevin Gallagher said FID on Barossa was consistent with the company’s ‘strategy for disciplined growth’ utilising existing infrastructure around its core assets.
“Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter this next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model,” Mr Gallagher said.
“As the economy re-emerges from the COVID-19 lockdowns, these job-creating and sustaining projects are critical for Australia, also unlocking new business opportunities and export income for the nation.”
He said the Barossa and Darwin life extension projects would create 600 jobs throughout the construction phase and secure 350 jobs for the next 20 years of production at the Darwin LNG facility.
“Less than a year since we completed the acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets and despite the global economic impact of a once-in-a-hundred-year pandemic, it is a great achievement to have extended the life of Bayu-Undan following the approval of the infill drilling program and now to have taken FID on the Barossa project,” Mr Gallagher continued.
“I’d like to thank the Australian, Northern Territory and Timor-Leste governments, our joint venture partners and our customers for their support.”
“I am delighted to welcome our Barossa joint venture partner SK E&S as a partner in Bayu-Undan and Darwin LNG and appreciate their support for today’s Barossa development decision.”
According to Santos’ statement, first gas production is targeted for the first half of 2025.