LNG

Santos Ltd, the Australian operator of two liquefied natural gas export plants and a main shareholder in Papua New Guinea LNG assets, has signed a long-term supply deal with Hokkaido Gas Co., the Japanese utility.

The Australian LNG plant operator Santos welcomed a decision from the Federal Court of Australia to clear the way for pipe-laying to commence for the Barossa Gas Export Pipeline to help provide new feed-gas supplies to the Darwin LNG plant in Australia’s Northern Territory.

The decision in favour of Santos saw the Court dismissing and application and discharging an injunction that had prevented pipelay activities south of the 86 kilometres (53 miles) point offshore.

“As per the ruling and in accordance with the Environment Plan in force for the activity, Santos will continue pipe-laying activity for the Barossa Gas Project,” said Adelaide-based Santos.

Barossa plan

The Santos-operated Barossa Gas Project is an offshore gas and condensate venture that proposes to provide a new sources of gas to the existing Darwin LNG facility
for which the previous resources from the Bayu Undan gas field in the Timor Sea have depleted.

Barossa gas shareholders also include South Korean and Japanese investors, including the largest Japanese LNG importer JERA Co. Inc.

Under the renewed Barossa plan feed gas will come from the Barossa field, located in Australian waters about 285km offshore Darwin, from 2025.

Project infrastructure will comprise a floating production storage and offloading (FPSO) facility and the subsea production system and the pipelines.

Santos noted that up to eight subsea wells are planned to be drilled in the Barossa field with a contingency plan for an additional two wells.

Gas and condensate would be gathered from the wells through the subsea production system and then brought to the FPSO facility via a network of subsea infrastructure.

Initial processing would occur at the FPSO facility, to separate the natural gas, water and condensate extracted from the Barossa field.

The dry natural gas would then be transported through the gas pipeline for onshore processing and export from Darwin LNG.

The condensate would be transferred from the FPSO to specialised tankers for export.

Nov 15 (LNGJ) - The Barossa gas project for Darwin LNG feed gas of Australian operator Santos appeared to be partially back on track. Santos reported that the Federal Court of Australia has ruled that pipe-laying activities can commence on an 86-kilometres section of pipeline for the Barossa Gas Export Pipeline (GEP) project.

   The Court has also set the date of December 4 for the commencement of a hearing brought by opponents of the Barossa project seeking to restrain Santos from continuing the pipelay until it revises its environmental plan. “Santos intends to vigorously defend those proceedings,” said the Adelaide-based company. “With the Barossa Project set to supply the Darwin LNG plant for years to come, it is important for local jobs, as well as opportunities for Traditional Owners, exports and relationships with investors and gas customers in Asia, that this project continues,” Santos stated.

Asia-Pacific LNG operator Santos has secured significant additional carbon-storage acreage after being awarded a Gas Storage Retention Licence with a joint venture partner at a site west southwest of Moomba in South Australia where Santos is already constructing one of the world’s first industrial carbon-capture and storage (CCS) projects.

BW Offshore, the global operator of floating production, storage and offloading (FPSO) units, said the Barossa natural gas project for the Timor Sea was progressing as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

BW Offshore, which has main offices in Oslo and Singapore, said it continued to execute the Barossa FPSO project with overall completion on schedule at 67 percent at the end of April 2023.

“Hull blocks have been assembled in the floating dock and preparations for float out are progressing, with major equipment arriving at the topside construction yard,” explained BW Offshore in its first-quarter earnings report.

The company said that it also progressed its strategy of capturing value from non-core assets with the sale of “BW Opportunity” in the first quarter and the subsequent divestment of “BW Athena” in April.

Operator

The Darwin plant in the Northern Territory is operated by Adelaide-based Santos with capacity to produce around 3.7 million tonnes of LNG per annum, mainly for Japanese buyers, including JERA Co. Inc, the Asian nation’s largest LNG importer and power group.

The Japanese have participated in the Darwin LNG project since 2003 through the power companies that formed JERA and when the Australian plant was first operated by ConocoPhillips before the US major sold its stake to Santos.

Darwin LNG was constructed to receive feed gas from the Bayu-Undan gas field, located in the Timor Sea, and had contributed to the stable supply of LNG for almost 17 years before becoming depleted.

BW Offshore reported net profit for first quarter of $17.8 million, down from $41.3M in the previous quarter and $46.3M in the first three months of 2022.

“We deliver on our plan to generate value from our asset base through divestments and are discussing potential redeployment-related work for ‘BW Opportunity’ with its new owner,” said Marco Beenen, Chief Executive of BW Offshore.

“This reflects a strong FPSO market with oil and gas companies seeking efficient solutions for safe, secure and reliable production,” added Beenen.

Gross operating income for the three months came to $79.0M, down from $84.4M in the prior-year quarter and $104.9M in the previous quarter.

Outlook

“The reduction is largely due to a non-recurring reimbursement recorded in fourth quarter 2022 for expenses incurred under the limited notice to proceed (LNTP) contract with Shell for the Gato do Mato (Brazil) project,” said BW Offshore.

In its Outlook, BW Offshore said it expected that the core units in the existing fleet would continue to “generate significant cash flow” in the time ahead supported by the $5.8Bln of firm contract backlog at end of March 2023, including the Barossa contract.

“The company is experiencing continued strong interest for infrastructure-type lease and operate FPSO projects, combined with continued access to equity and debt financing for field development initiatives with long-term production, low break-even costs and low carbon emissions,” it stated.

“Discussions are ongoing with the buyer of ‘BW Opportunity’ for EPCC work and an operations and maintenance contract related to a redeployment of the FPSO which can drive growth in the FPSO segment,” added BW Offshore.

Australian LNG operator Santos delivered a doubling of annual LNG sales revenues while advancing expansion plans in Australia and Papua New Guinea as prices rose with increasing demand even amid an Asia-Pacific economic slowdown.

Australian LNG exports reached a new record of 81.4 million tonnes in 2022 and the export revenue increased by 86 percent year-on-year to A$92.8 billion (US$63.4Bln) in the 12 months to the end of December because of much higher prices and Australia appeared to tie in volume terms as World No. 1 exporter along with Qatar and the US.

BW Offshore is making progress on the Barossa natural gas floating production, storage and offloading (FPSO) project for the Timor Sea as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

Australian LNG operator Santos said it made a significant discovery in the Pavo-1 exploration well, located 46 kilometres east of the existing Dorado field in the Bedout Sub-Basin offshore Western Australia and is the first find made since its takeover of Oil Search.

Australian LNG plant operator Santos, which has plant and project stakes in Queensland and in the Northern Territory as well as in Papua New Guinea, said new proved plus probable reserves increased by 80 percent in the year due to the merger with Oil Search and the final investment decision on the Barossa gas field.