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of operating LNG mega-projects, as Chevron after the other, to inspect their kettles for simi-
continues to tackle separate issues at its Gorgon lar weld quality issues and make any necessary
LNG facility, also in Western Australia. repairs.
The super-major only restarted Train 2 at The issue at Wheatstone is far less serious,
Gorgon in late November after keeping the train having not resulted in any outages at the lique-
offline for several months to address weld qual- faction plant, but nonetheless poses an addi-
ity issues that it had discovered on propane heat tional headache for Chevron as it works to have
exchangers – or kettles – during routine mainte- all of its Australian LNG-related infrastructure
nance. It will now take Trains 1 and 3 offline, one operating smoothly.™

Santos, Mitsubishi strike

supply deal for Barossa project

PROJECTS & AUSTRALIA’S Santos announced on Decem- “The [sale and purchase agreement] delivers a
COMPANIES ber 7 that it had signed a 10-year agreement to firm LNG offtake arrangement which represents
supply LNG from its proposed Barossa project over 80% of Santos’ equity LNG volume from the
to Diamond Gas International, a unit of Japan’s Barossa project at our expected 50% interest level
Mitsubishi. Under the binding agreement, San- following the previously announced sell-down
tos will supply Diamond Gas with 1.5mn tonnes to JERA, while the JKM-indexation provides
per year (tpy) of LNG, whose price will be based portfolio balance to our existing oil-linked LNG
on the Platts Japan Korea Marker (JKM). offtake agreements from [Gladstone LNG] and
There is an option to extend the agreement PNG LNG,” he added.
beyond the initial 10-year term. Santos and Mitsubishi also said they had
Santos’ CEO, Kevin Gallagher, said the deal signed a memorandum of understanding
represented the company’s first long-term LNG (MoU) to jointly explore opportunities for car-
sale from one of its major projects. It takes San- bon-neutral LNG from Barossa. These include
tos closer to a final investment decision (FID) on collaborating on opportunities relating to San-
Barossa, which it deferred earlier this year owing tos’ proposed Moomba carbon capture and
to the market downturn but now hopes to reach storage (CCS) project, bilateral agreements for
by the first half of 2021. Barossa, located in the carbon credits and potential future development
Bonaparte Basin offshore Australia’s Northern of zero-emissions hydrogen, they added.
Territory, will be used to backfill Santos’ Darwin The supply deal comes during a period where
LNG facility. long-term supply agreements have become
“Barossa is a globally competitive, low-cost increasingly rare amid low LNG prices and a
brownfield LNG project providing new supply growing number of options available to buyers.
into a tightening LNG market, where JKM- It illustrates that some appetite for striking long-
based pricing is an increasingly deep, liquid and term offtake agreements remains, and comes as a
flexible marker for both sellers and buyers,” Gal- boost to other LNG producers that are still trying
lagher stated. to take their projects to FID.™

P16 www. NEWSBASE .com Week 49 10•December•2020