Australian oil and gas company Santos has taken a final investment decision (FID) on the $3.6bn Barossa project, located offshore Australia’s Northern Territory.
The Barossa project will see the development of the Barossa gas and condensate field in the Timor Sea, 300km north of Darwin. The works under the project include mooring of a floating production, storage, and offloading (FPSO) vessel, drilling of subsea production wells along with the installation of associated subsea infrastructure and a new gas export pipeline.
The pipeline will connect to the existing Bayu-Undan to Darwin LNG pipeline.
Santos expects to draw the first gas from the Barossa project in the first half of 2025.
Last week, Santos awarded a $4.6bn contract to BW Offshore for construction, connection, and operation of the FPSO.
According to the Australian oil and gas company, the FID on the LNG supply project also enables the launch of a $600m investment in the Darwin LNG life extension and pipeline tie-in projects.
The projects are expected to extend the life of the company’s operated Darwin LNG plant for nearly 20 years.
Santos managing director and CEO Kevin Gallagher said: “Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter this next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model.
“As the economy re-emerges from the COVID-19 lockdowns, these job-creating and sustaining projects are critical for Australia, also unlocking new business opportunities and export income for the nation.
“The Barossa and Darwin life extension projects are good for the economy and good for local jobs and business opportunities in the Northern Territory.”
Gallagher added that the Barossa and the Darwin LNG life extension projects will generate 600 jobs during the construction stage. Besides, the projects will secure 350 roles for the next 20 years of production at the Darwin LNG plant.
The FID taken on the Barossa project paves the way for the closing of the previously announced 25% stake sale by Santos in the Darwin LNG plant and Bayu-Undan gas field to SK E&S for $390m. The South Korea-based SK E&S is partnering Santos in the Barossa gas and condensate with a 37.5% stake.
Japan-based JERA is set to join the duo in the project having signed a deal in April 2020 to acquire 12.5% stake from Santos.
