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Santos said on Tuesday that the APF tie-in project will deliver gas from the Santos-operated Agogo production facility to the PNG LNG gas pipeline via a new 19-kilometer pipeline, together with two new wells and associated production facility modifications.
According to Santos, its share of capital expenditure is approximately $160 million, with gross capex approximately $400 million over three years.
First gas is targeted for the second quarter of 2028.
ExxonMobil holds a 33.2 percent operating interest in the $19 billion PNG LNG project, while Santos has a 39.9 percent stake following the completion of a 2.6 percent stake sale to Papua New Guinea’s national oil and gas company Kumul, which now owns a 19.4 percent stake.
Other partners in PNG LNG include Mineral Resources Development Company and Eneos Xplora.
Santos’ CEO and managing director Kevin Gallagher said the APF tie-in project is a “highly value-accretive investment that meets Santos’ disciplined capital allocation criteria and will support Santos’ long-term production profile with a 12-year production plateau, and the potential to continue production beyond 2050.”
He said the execution of this project will convert Santos’ 66 mmboe 2P undeveloped reserves into developed reserves, delivering incremental net production of approximately 54 mmscf/d with “significant” upside potential depending on reservoir performance.
“With an expected IRR of greater than 50 percent and a payback period less than four years from FID, and approximately two years from first gas, the project is expected to be strongly value accretive, support our long-term production profile and sustain feed gas supply to PNG LNG,” Gallagher said.
Santos will now focus on progressing detailed design for the facility modification, awarding the two main construction contracts, and progressing the temporary construction camp to drive towards first gas in the second quarter of 2028.