Australian LNG player Santos and its joint venture partner Beach Energy have taken a final investment decision to proceed with the Moomba Central Optimisation (MCO) project in the Cooper Basin, South Australia.
Santos said on Monday it will invest $357 million (net Santos) in the project, which is planned to be delivered over three years.
The MCO project will replace seven ageing gas-driven compressor stations with one electric-driven compressor station that will debottleneck upstream infrastructure and unlock future production growth from the Cooper Basin Central Fields in South Australia.
At the Moomba gas plant, new inlet compression and additional power generation capacity will be installed to receive gas and power the upstream satellite.
Santos targets capex and opex savings of more than $600 million over the life of the Central Fields by moving to more efficient, modern infrastructure.
According to the firm, the Central Fields contain more than half of the remaining 2P reserves in the Cooper Basin and have higher productivity wells.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the MCO project was consistent with Santos strategy for disciplined growth around the company’s existing infrastructure.
“The Cooper Basin has been a cornerstone of Australia’s gas supply for more than 60 years. The MCO project will unlock significant value by modernising our infrastructure and extending the productive life of this world-class resource,” Gallagher said.
He noted that Santos recently executed a key term sheet with the South Australian government for gas supply of 20 PJ per year from the Cooper Basin from 2030 to 2040, for the state’s strategic gas reserve.
“Subject to concluding a GSA, Santos intends to use funds from the prepayment component of this deal to invest in the MCO project, improving the economics further,” Gallagher said.