LNG

Australian LNG plant operator Santos and Italian oil and gas company Eni have signed an accord to cooperate on liquefied natural gas and other opportunities in northern Australia and in and around the former Portuguese colony of East Timor, now known as Timor-Leste.

“The areas of cooperation include assessing the synergies of sharing possible infrastructures associated with gas field developments around Barossa and Evans Shoal, the pipeline to Darwin and onshore associated gas processing leading to LNG expansion developments,” said a joint statement.

Other areas of Eni-Santos cooperation include the possible development of the Petrel and Tern gas fields through Blacktip-Yelcherr gas plant facilities.

“As I said when I was in Darwin to announce our FID decision for Barossa, we have approval for two more Trains at Darwin LNG and we are open to third-party gas opportunities,” said Santos Chief Executive Kevin Gallagher.

Their memorandum of understanding (MOU) includes investigating options to re-purpose the Bayu-Undan gas field facilities in the Timor Sea to extend the life of the project, including a carbon-capture and storage venture, subject to the agreement of the Timor-Leste government.

Gallagher said the MOU built on the momentum for the development plans for northern Australia following the final investment decision taken by Santos on the Barossa gas and condensate project to give a life extension to the Darwin LNG for the next 20 years.

Santos now operates the Darwin plant, as well as the Gladstone LNG facility in Queensland, after acquiring the North Australian assets of US major ConocoPhillips.

“Eni are already a highly valued partner in the Bayu-Undan project and this MOU strengthens our collaboration and cooperation,” added Gallagher.

“CCS opportunities at Bayu-Undan are extremely exciting for Santos and Eni and today we are saying, we would like to be open for business to take your CO2,” declared the Santos CEO.

“In 2019 the London Convention was amended to allow CO2 to be transported across jurisdictions to enable the establishment of storage hubs,” Gallagher explained.

“The CCS project at Bayu-Undan could provide a new job-creating and revenue-generating industry for Timor-Leste with quality carbon credits increasing in both demand and value internationally,” added the statement.

The CCS facility could capture and store CO2 from industries in Australia’s Northern Territory and help it meet its net-zero emissions by the 2050 target date.

“That’s good for the environment, good for local jobs, good for local investment and good for regional development,” stated Gallagher

Australian LNG plant operator Santos has awarded contracts to European firms for the supply and installation of subsea infrastructure for the Barossa natural gas field that will provide future feed-gas for the Darwin LNG export plant in the Northern Territory.

Santos, operator of the Gladstone LNG plant in Queensland and with stakes in Darwin LNG and the Papua New Guinea plant, said these contract awards were the final commitment made prior to the final investment decision for the Barossa project.

The contract for the transport and installation of all the subsea umbilicals, risers, and flowlines, as well as the supply of the in-field flowlines, was awarded to European firm Subsea 7, while Aker Solutions of Norway will supply the umbilicals and National Oilwell Varco Denmark I/S will supply the flexible risers.

“These are the final major facilities contracts for Barossa as we get closer to pushing the button on the project’s development in the second quarter,” said Santos Chief Executive Kevin Gallagher.

“They follow the award of the floating production, storage and offloading  (FPSO) unit, subsea wells and subsea production system, and gas export pipeline tenders, with the contract for the drilling of the production wells to be awarded in the near future,” explained Gallagher.

“They represent the final stages of the front-end engineering design phase and give us greater certainty over cost and schedule for the Barossa development,” stated the CEO of the Adelaide-based company.

The Barossa project area encompasses petroleum permit NT-RL5 located in Commonwealth waters, 300 kilometres north of Darwin, offshore the Northern Territory.

The development concept consists of an FPSO, six subsea production wells, supporting in-field subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan-to-Darwin pipeline, supplying gas to Darwin LNG.

On 14th October 2019, Santos announced the acquisition of Australian assets from ConocoPhillips in northern Australia.

These included the Timor-Leste portfolio including its interests in Darwin LNG and the Bayu-Undan and Barossa gas fields. 

Completion of the transaction and the planned sell-down to SK E&S of South Korea will leave Santos with increased stakes in these assets amounting to 43.4 percent for Darwin LNG, 43.4 percent for Bayu-Undan and 62.5 percent of the Barossa field.

Santos has said it was prepared to sell down equity in Barossa to a target ownership of 40-50 percent to achieve increased partner alignment.