Santos’ joint venture (JV) partners have reached an agreement to enter the front-end engineering and design (FEED) phase for the development of the Barossa project to backfill Darwin Liquefied Natural Gas (DLNG) in Australia.
Located 300km north of Darwin, the Barossa gas field is part of Santos’ Northern Australia long-life, natural gas portfolio.
During the FEED phase, the companies will carry out engineering and commercial work focused on the finalisation of the project’s technical detail, costs, LNG sales agreements and negotiation of access arrangements with the owners of DLNG and the Bayu-Undan to Darwin gas pipeline.
Santos managing director and chief executive officer Kevin Gallagher said: “The Barossa FEED decision consolidates its position as the leading candidate for DLNG backfill when Bayu-Undan production ceases in the early 2020s.
“It’s a great step forward for Santos because our higher equity position means that a successful Barossa development would more than double our current production out of Northern Australia.
“Barossa’s development would extend the operating life of DLNG for more than 20 years, help supply growing demand for natural gas in Asia to clean up Asian air pollution and reduce global carbon emissions, and provide significant jobs and business opportunities in the Northern Territory, as well as export income here in Australia.”
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The Barossa development concept comprises a floating production storage and offloading (FPSO), six subsea production wells to be drilled in the initial phase, supporting in-field subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin pipeline, all located in the Australian Commonwealth waters.
A final investment decision (FID) for the project is expected to be taken towards the end of next year.