Santos and Eni have agreed to cooperate on gas field development and carbon capture and storage (CCS) opportunities in northern Australia and Timor-Leste.
In this connection, the Australian energy company has signed a memorandum of understanding (MOU) with Eni’s subsidiary Eni Australia.
Under the MOU, the parties will cooperate on optimisations, driving synergies, and sharing of infrastructure between the Santos-operated Barossa gas project and the Eni-operated Evans Shoal development. Both the projects are located offshore Australia.
The companies will also work together on the possible expansion of Darwin LNG project and options to repurpose and extend the life of Bayu-Undan field that supplies gas to it.
Eni and Santos are already partners in the Bayu-Undan gas and condensate field as well as in the Darwin LNG plant and the connecting gas pipeline.
The duo has agreed to explore joint development of CO2 capture and storage or utilisation (CCUS) facilities. The facilities will not only serve assets owned by them but also cater to interested third-party projects in the Darwin area.
The companies plan to develop a carbon capture and storage project initially, which will be subject to the consent of the Timor-Leste government.
The long term goal of the parties will be to enable the creation of a CO2 management hub in Australia’s Northern Territory.
Santos managing director and CEO Kevin Gallagher said: “A CCS project at Bayu-Undan could provide a new job-creating and revenue-generating industry for Timor-Leste with quality carbon credits increasing in both demand and value internationally.
“Capturing and storing CO2 from industries in the Northern Territory will help it meet its net-zero emissions by 2050 target. That’s good for the environment, good for local jobs, good for local investment and good for regional development.”
Additionally, the partners will look to collaborate in new upstream development opportunities pertaining to other offshore stranded resources in northern Australia.
Eni stated: “For Eni this collaboration with Santos is an important step in the pathway to decarbonising upstream activity in Australia, leveraging both companies’ expertise with the aim of reducing CO2 emissions.
“This agreement demonstrates the importance of adopting a synergistic approach that promotes cooperation between different players in the sector.”
In March, Santos has taken a final investment decision (FID) on the $3.6bn Barossa project, located offshore Australia’s Northern Territory.
