LNG

July 18 (LNGJ) - Australian LNG operator Santos said LNG sales revenues in the second quarter dropped to US$762 million from US$838M in the prior-year quarter. Santos added that 22 LNG cargoes were shipped during the three months from the Gladstone LNG export plant in Queensland. However, no LNG cargoes were delivered from the Darwin LNG plant as the Bayu-Undan feed-gas field continues to deplete and volumes were being sent into the Australian Northern Territory market.

   “The Barossa gas project to backfill the Darwin LNG plant is 77 percent complete,” said the company. Santos added that a further 27 cargoes were exported from the Papua New Guinea liquefaction plant where the Adelaide-based company is a shareholder. Santos also noted that the company’s Moomba carbon-capture and sequestration project in south Australia was being commissioned and was on schedule for first injections of CO2 this year.

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.

Australian and Papua New Guinea liquefied natural assets owner Santos posted a first-quarter decline in LNG sales revenues as prices dropped in various operations, though reported progress in projects in Australia to boost gas resources. 

Santos said overall revenues in the first three months of 2024 fell to US$1.39 billion from US$1.63Bln in the prior-year quarter, including LNG, domestic gas, crude oil, condensate and liquefied petroleum gas.

Quarterly LNG sales alone amounted to US$901 million, down from US$1.07Bln in the same quarter of 2023.

LNG shipments

Santos’s LNG projects shipped 53 cargoes in the first quarter, of which five were sold on a Japan-Korea Marker-linked basis, all from PNG offtake.

The company said average realised LNG prices fell to US$12.68 million British thermal units in the first quarter from $14.46 MMBtu in the same quarter of 2023.

However, the LNG price was slightly higher than the prior quarter price of US$12.33 MMBtu to the end of December, while realised prices were higher for oil-linked sales contracts reflecting the lagged Japan Customs-cleared Crude (JCC) prices.

Three-month lagged JCC averaged US$92.29 a barrel in the first quarter of 2024 compared with US$83.08 a barrel in the fourth quarter of 2023.

The Gladstone LNG plant in Queensland sent out 27 cargoes, two fewer than in the previous quarter and the same as in the prior-year quarter.

Santos said 60 onshore coal-seam gas well were drilled and 47 connected for the Gladstone plant during the first three months of 2024 to maintain output from the Fairview, Arcadia and Roma CSG fields.

The PNG plant at Caution Bay operated by ExxonMobil Corp. shipped 27 cargoes compared with 30 in the previous three months and 28 in the prior-year quarter.

PNG expansion

“Steady production continued at PNG LNG, supported by strong production from Santos-operated fields. LNG production was down on the previous quarter due to a combination of Hides field natural decline and annual preventative maintenance undertaken at the Central Processing Facility during the quarter,” Santos explained.

French major TotalEnergies, operator of the Papua LNG project to expand PNG LNG production, has advised Santos that it would keep working with contractors to agree commercially-viable engineering, procurement and construction contracts to reach an expected final investment decision by 2025.

Santos Chief Executive Kevin Gallagher said the “strong underlying business performance, combined with a disciplined focus on operational excellence” delivered a “robust” first-quarter result.

“The first quarter brought strong free cash flow which provides a solid foundation for the year ahead. It positions us well to fund shareholder returns, backfill and sustain our existing business, complete our major projects and grow our Santos Energy Solutions business,” Gallagher said.

“I am very pleased that Barossa pipelaying activities are now almost complete and all other Barossa activities are progressing well with first gas expected in the third quarter of 2025,” said Gallagher on the project that will help resume LNG output at the Darwin liquefaction plant in the Northern Territories.

Barossa gas update

The existing Bayu-Undan field continued to produce gas for the Darwin plant through the first quarter for the domestic market.

“The asset is expected to reach end of field life in the second quarter of 2024,” said Santos.

The Barossa gas and condensate project to backfill Darwin LNG is currently 70.6 percent complete and the integration of the topside modules on the floating production storage and offloading (FPSO) platform continued in Singapore with 13 of 16 modules successfully loaded onto the hull.

The company added that installation of the gas export pipeline for Darwin LNG commenced in November 2023 with 213 kilometres of the 262km pipeline completed to the end of the first quarter. Full completion was expected before the start of May.

Gallagher said that the company’s Pikka oil project in Alaska had made excellent progress over the winter months and was on track for first production in 2026.

“Barossa and Pikka are world-class projects that will be transformative for Santos and set the company up with long-term, stable cash flows for the next 10-15 years at least,” the CEO said.

Gallagher explained that the company’s Moomba carbon-capture and sequestration project in south Australia was on scheduled for the first injections of CO2 this year and would “a game-changer for decarbonising” of Santos operations.

“We can now see line of sight to our major projects progressively coming online in 2024, 2025 and 2026, putting us in a strong position to deliver sustainable, long-term shareholder returns,” Gallagher stated. 

Feb 26 (LNGJ) - Santos, the Australian and Papua New Guinea LNG plant shareholder and operator, has secured finance for the company’s share of the US$220 million Moomba carbon-capture and storage (CCS) project in South Australia. The facilities, arranged over five years and totalling US$150M, will be used to cover project costs incurred to date and to use as the project progresses to the first carbon injection targeted for mid-2024.

   Santos said the willingness of banks to fund energy transition projects at very competitive rates indicated their recognition of CCS as a vital tool to control carbon. “The strong support Santos has received is underpinned by the progress we are making focused on reducing our own emissions and those of our customers, as well as on developing low-carbon fuels as customer demand evolves,” said Santos Chief Executive Kevin Gallagher.

Santos, the Asia-Pacific LNG operator with assets in Australia and Papua New Guinea and that recently held unsuccessful merger talks with Australian peer Woodside, has issued its annual reserves statement showing resources comprising 84 percent natural gas and 16 percent liquids.

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.

Australian liquefied natural gas operator Santos has yet to detail any additional progress in its merger talks the Australian peer Woodside Energy for a combination valued at A$88 billion (US$58Bln), though has made advances on the Barossa gas project for Darwin LNG and signed deals with two Japanese companies for the Moomba carbon-capture and storage venture.

Australian liquefied natural gas operator Santos said its share of LNG output from its stakes in Australian and Papua New Guinea would be increasing in the years ahead as it also gave key dates for final investment decisions and first gas while acknowledging obstructions to its offshore activities by Australian regulatory uncertainty.

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.

Santos has become the latest Australian energy company along with Woodside Energy to have multi-billion dollar offshore natural gas pipeline projects blocked by the Federal Court of Australia for reasons of “underwater cultural heritage” even as in the case of Santos an independent expert anthropologist concluded that no such underwater cultural heritage places existed in the whole area.