Page 16 - AsianOil Week 13 2021

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Santos takes Barossa FID

PROJECTS & THE Santos-led consortium developing the Santos managing director and CEO Kevin
COMPANIES Barossa natural gas and condensate field has Gallagher said the Barossa FID was consist-
reached a final investment decision (FID) on ent with the company’s strategy for disciplined
the $3.6bn project that lies offshore Australia’s growth utilising existing infrastructure around
Northern Territory. the company’s core assets.
Santos said on March 30 that the FID also “Our strategy to grow around our five core
kick-started the $600mn investment in the asset hubs has not changed since 2016. As we
Darwin LNG life extension and pipeline tie-in enter this next growth phase, we will remain dis-
projects, which will expand the facility’s life for ciplined in managing our major project costs,
around 20 years. consistent with our low-cost operating model,”
The Barossa development will comprise a Gallagher said.
floating production, storage and offloading Barossa FID is the final condition required
(FPSO) vessel, subsea production wells, sup- for completion of the 25% equity sell-downs
porting subsea infrastructure and a gas export in Darwin LNG and Bayu-Undan to SK E&S,
pipeline tied into the existing Bayu-Undan to which is also a partner in Barossa. Completion of
Darwin LNG pipeline. First gas production is the SK transaction is expected to occur at the end
targeted for the first half of 2025. of April, with Santos expecting to receive around
Santos, which operates the 3.7mn tonne per $200mn in net proceeds from the transaction.
year Darwin LNG plant, described the Barossa Santos and JERA continue to progress talks
project as one of the “lowest cost”, new LNG on the sale of a 12.5% interest in Barossa to the
supply projects in the world and said it would Japanese trader. The completion of the sell-
give Darwin LNG a competitive advantage in a downs will see Santos’ interests in Bayu-Undan
tightening global market. and Darwin LNG fall to 43.4%, while its stake in
RBC Capital Markets analyst Gordon Barossa will drop to 50%.
Ramsay told the Sydney Morning Herald that Australian Resources Minister Keith Pitt
the company was targeting production costs of described the Barossa FID as a “tremendous
$2 per mmBtu ($55.32 per 1,000 cubic metres), show of confidence” in Australia’s long-term
“making it the lowest cost new source of LNG resources future, adding: “It is also a great
supply in the Australian region” at $5.50 per sign that oil and gas market conditions have
mmBtu ($152.13 per 1,000 cubic metres). improved.”™

P16 www. NEWSBASE .com Week 13 01•April•2021