Australia’s Santos to spend $250 million on GLNG drilling campaign

Australian LNG producer Santos said its GLNG joint venture would spend $250 million to drill and connect more than 130 new production wells in Queensland’s Fairview gas field, north of Roma.

Besides operator Santos, other GLNG partners are Malaysia’s Petronas, France’s TotalEnergies, and South Korea’s Kogas.

The integrated LNG project includes extracting coal seam gas from fields located in the Bowen and Surat Basin in Queensland. The supplies go to the 7.8 mtpa export plant on Curtis Island as well as for the domestic market.

Santos said in a statement that the new project would produce around 78 terajoules per day at peak. This is equivalent to about 25 percent of domestic demand in Queensland.

According to the firm, drilling work would start in June with first gas in October this year.

“While the gas will feed the GLNG plant in Gladstone and bring in export revenue for the nation, investments like this free up other supply sources for the domestic gas market, which is desperately needed,” Santos chief Kevin Gallagher said in the statement.

“Queensland’s coal seam gas would never have been developed without access to huge international markets and the massive capital investment of our joint venture partners and customers in Asia. Without that investment, there would be less gas supply in the domestic market today,” he said.

Gallagher said this new investment would provide ongoing employment for 160 drilling and construction contractors over the next two and a half years.

It also would deliver an additional A$91.5 million ($65.7 million) in royalties for Queensland, according to the CEO.

Santos is now a larger company following the completion of its merger with PNG-focused Oil Search in December last year.

The company’s core business includes Darwin LNG and Barossa project, as well as the PNG LNG and GLNG facilities.

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