Santos says Barossa gas project almost 80 percent complete

Santos revealed this in its H1 report issued on Wednesday.

Back in 2021, Santos took a final investment decision for its $3.6 billion Barossa project.

Natural gas will be extracted from the Barossa field, located in Commonwealth waters about 285 kilometers offshore north-north west from Darwin, and transported via a pipeline to the existing Darwin LNG facility.

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.

To prepare for Barossa gas, Santos is working on the Darwin LNG life extension project.

FPSO and gas pipeline

Santos said in its report the FPSO moved to commissioning yard in Singapore and commissioning activities commenced.

Also, the FPSO is “on track” to head to Australia in the first quarter of 2025, it said.

Besides the FPSO, installation of the 262 km gas export pipeline was completed in early May, and testing activities were completed in June.

Pre-commissioning activities were completed in July, Santos said.

Santos said the third Barossa well has been successfully drilled and completed with “better-than-expected reservoir results.”

The company said Darwin Pipeline Duplication (DPD) construction started connecting the gas export pipeline (GEP) to the Darwin LNG plant.

At full production rates, Barossa is expected to add around 1.8 mtpa to Santos’ expanding LNG portfolio.

GLNG to deliver 6 million tonnes of LNG

As per the Santos-operated Gladstone LNG export plant on Curtis Island near Gladstone, the facility is set deliver 6 million tonnes of of LNG this year, according to Santos.

The 7.8 mtpa facility produced 1.33 million tonnes of LNG during the second quarter, up from 1.26 million tonnes in the same quarter last year and down from 1.64 million tonnes in the prior quarter.

Santos previously said LNG production was lower than the previous quarter due to seasonal shaping of the project’s domestic gas commitment.

Over the course of the year, the number of cargoes shipped are seasonally shaped to be higher in the first and fourth quarters and lower in the second and third quarters to support the east coast domestic gas market.

Results

During the first half, the independent LNG producer reported sales revenue of $2.71 billion,
Ebitdax of $1.84 billion, underlying profit of $654 million, and free cash flow from operations
of $1.06 billion

Underlying profit decreased 18 percent compared to the same period last year, while sales revenue decreased 9 percent year-on-year.

Guidance for 2024 remains unchanged.