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Australian LNG player Santos said on Monday the JV and Timor GAP have agreed terms of a sale and purchase deed to transfer the interest in the Bayu-Undan upstream project to Timor GAP, with an economic date of July 1, 2024.
Execution of the sale and purchased deed to effect this transaction is planned to occur in mid-September, according to Santos.
Also, a seventh extension of the production sharing contract to June 30, 2026 has been confirmed.
Santos did not reveal the price tag of the deal.
The Bayu-Undan upstream project comprises the offshore petroleum field, and offshore production and processing facilities located in Timor-Leste (East Timor).
The joint venture participants prior to Timor GAP’s entry in to the joint venture are Santos (43.5 percent), SK E&S (25 percent), Inpex (11.4 percent), Eni (11 percent), and Tokyo Timor Sea Resources (9.1 percent).
Following completion of the transaction, Santos will have a 36.5 percent interest in the JV, SK E&S will have 25 percent, Inpex 9.6 percent, Eni 9.2 percent, Tokyo Timor Sea Resources 7.6 percent, and Timor GAP 16 percent.
CCS
The Bayu-Undan field is located about 500 kilometers northwest of Darwin in Timor-Leste offshore waters.
The project has provided more than $25 billion in revenue for Timor-Leste over its life so far, Santos claims.
More than half the offshore workforce at Bayu-Undan is Timorese with the project currently supporting about 350 onshore and offshore jobs in Timor-Leste.
Bayu-Undan continues to produce gas into the Australian domestic market via a gas sales agreement with the Power and Water Corporation of the Northern Territory, as well as producing liquids.
In November last year, the last LNG cargo produced from the Bayu-Undan gas field has sailed from the Santos-operated Darwin LNG plant in Australia’s Northern Territory.
The final LNG shipment from Bayu-Undan left the 3.7 mtpa Darwin LNG plant at Wickham Point on November 11.
The Darwin LNG plant launched operations in 2006 and the facility is now being readied for the next 20 years, in preparation for the start of Barossa gas production in 2025.
Last year, Santos and its Bayu-Undan joint venture partners have signed a memorandum of understanding with Timor GAP to explore partnership opportunities for the proposed Bayu-Undan carbon capture and storage project offshore Timor-Leste.
Santos managing director and CEO Kevin Gallagher said the transaction “demonstrates the company’s commitment to a long-term partnership with Timor-Leste in the development of the country’s petroleum resources.”
“I have long wanted to see Timor GAP as a partner of Santos and I welcome them as a participant in the Bayu-Undan joint venture,” Gallagher said.
Santos said it remains committed to working with Timor-Leste and the joint venture to repurpose Bayu-Undan into a new large-scale, commercial carbon capture and storage project when petroleum production ends.
This would create an ongoing source of revenue, local jobs and business opportunities for Timor-Leste by providing carbon management services to the Asian region, the firm said.