Australia’s Santos and Italy’s Eni signed a memorandum of understanding to work on expanding the Darwin LNG plant but also on a carbon capture and storage project at the Bayu-Undan facilities.
Eni has an 11 percent stake in the Santos-operated Bayu-Undan gas field located offshore Timor-Leste which supplies the latter’s Darwin LNG facility at Wickham Point in Australia’s Northern Territory.
The LNG plant has the capacity to produce about 3.7 million tonnes of LNG per annum from one train.
Santos said in a statement on Monday the areas of cooperation for the duo include assessing the synergies of sharing possible infrastructures associated with gas field developments around Barossa and Evans Shoal but also a pipeline to Darwin and onshore associated gas processing leading to LNG expansion developments, it said.
The cooperation also includes investigating options to re-purpose the Bayu-Undan facilities to extend the life of the project, including a carbon capture and storage project, subject to the agreement of the Timor-Leste government.
Santos chief executive Kevin Gallagher said the memorandum built on the momentum for development of northern Australia following Santos’ decision on the Barossa gas and condensate project and life extension for Darwin LNG for the next 20 years.
To remind, operator Santos has recently announced the final investment decision on the $3.6 billion Barossa gas project offshore northern Australia. Santos expects first gas from Barossa to backfill Darwin LNG in the first half of 2025.
Bayu-Undan CCS project
“CCS opportunities at Bayu-Undan are extremely exciting for Santos and Eni and today we are saying, we would like to be open for business to take your CO2,” Gallagher said.
“In 2019 the London Convention was amended to allow CO2 to be transported across jurisdictions to enable the establishment of storage hubs,” he said.
The chief executive 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,” he said.
Petrel and Tern development
Other areas of cooperation include the possible development of Petrel and Tern fields through Blacktip/Yelcherr gas plant facilities, according to Santos.
“As I said when I was in Darwin to announce our FID decision for Barossa, we have approval for two more trains at DLNG and we are open to third party gas opportunities,” Gallagher said.
According to Santos, the non-binding agreement is a “demonstration of intent” by the duo to collaborate together and with other parties in the region to use existing infrastructure “more efficiently, unlock the wealth of regional gas resources, and create new low-carbon business opportunities for both northern Australia and Timor-Leste.”