LNG

Australia’s largest liquefied natural gas companies Woodside Energy and Santos said they were in discussions that could lead to a merger of the two companies valued at a combined A$88 billion (US$58Bln) and which would create a dominant LNG force in the Asia-Pacific region.

The Australian Government has concluded an agreement with the East Coast LNG exporters in Queensland to ensure that uncontracted gas held by the three export plants in the state would first be offered to the domestic market before being offered to international customers.

Australian LNG plant operator Santos has started front-end engineering and design for the Dorado project in the Bedout Sub-Basin offshore Western Australia and expects to boost natural gas supplies for the domestic market.

Australian LNG plant operator Santos, as operator of the Bayu-Undan Joint Venture in the Timor Sea, has started its new infill drilling programme for the Darwin LNG plant in the field located in the waters of Timor-Leste.

April 22 (LNGJ) - Australian LNG operator Santos, whose shareholdings are in the Gladstone facility in Queensland, Darwin LNG in the Northern Territory and Papua New Guinea LNG, forecast higher LNG prices in the second quarter after the Adelaide-based company reported US$964 million in revenues in the first three months of 2021.

   Santos said production was 2 percent lower than in the December quarter, primarily due to lower domestic gas demand and unplanned maintenance in PNG LNG. Higher GLNG equity production from coal-seam gas fields supported annualised LNG output of 6.4 million tonnes per annum. CEO Kevin Gallagher said Santos had delivered another strong quarter of production and sales volumes. “This was despite the three-month lag in oil-linked LNG prices, which should see stronger prices in the second quarter,” he stated.

Australian LNG operator Santos has completed the acquisition of the northern Australia and Timor-Leste assets of US major ConocoPhillips for a reduced purchase price of US$1.265 billion because of the oil price slump.

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. 

Australian and Japanese energy companies along with US major ConocoPhillips have signed accords linked to legislation implemented by Australia for a treaty with the tiny southeast Asian nation of Timor-Leste to establish their maritime boundaries in the Timor Sea off northwest Australia.