Australian LNG player Santos said it has taken a final investment decision (FID) on the Darwin pipeline duplication project, located offshore the Northern Territory.
The decision would extend the Barossa gas export pipeline to the Santos-operated Darwin LNG facility and allow for the repurposing of the existing Bayu-Undan to Darwin pipeline to facilitate carbon capture and storage (CCS) options, according to Santos.
Santos operates the Barossa project and its partners are South Korea’s SK E&S with a 37.5 percent stake as well as Japan’s Jera with a 12.5 percent stake.
Gas from the Barossa field, located 300 kilometres north of Darwin, is intended to replace the current supply from the Bayu-Undan facility located in Timor-Leste.
In March last year, Santos took an FID on its $3.6 billion Barossa project to secure feed gas for the Darwin LNG plant in the Northern Territory.
The Darwin LNG plant has the capacity to produce about 3.7 million tonnes of LNG per annum.
Santos expects first gas production at Darwin LNG using Barossa gas in the first half of 2025.
CEO Kevin Gallagher said in the statement the Darwin LNG life extension, pipeline duplication, and Bayu-Undan CCS projects would “promote sustainable development and jobs growth in the Northern Territory and Timor-Leste, while building momentum for a whole of region carbon reduction solution.”
In addition, taking FID on the Darwin pipeline duplication project would allow for the Barossa project to be “CCS ready”, Gallagher said.
“The Bayu-Undan CCS project has the potential to capture and store up to 10 million tonnes of carbon dioxide per annum, equivalent to about 1.5 percent of Australia’s carbon emissions each year from other projects, customers and other hard to abate industries and has the potential to be the largest CCS project in the world,” he said.
Adding the Darwin pipeline duplication project is estimated to increase Santos’ share of capital expenditure for the Barossa project by about $311 million, meaning the project is worth about $622 million.
Moreover, the Barossa joint venture has agreed with the Darwing LNG joint venture partners to terminate the toll arrangement for using the original Bayu-Undan to Darwing LNG pipeline, reducing operating expenses for Barossa, Santos said.
Santos expects work to start on the Darwin pipeline duplication project in 2023, subject to Commonwealth and NT regulatory approvals.
Also, the firm expects a final investment decision on Bayu-Undan CCS in 2023.
Santos added it continues to work with Australian and Timor-Leste governments to establish regulatory frameworks to support future CCS operations.