PERTH (miningweekly.com) – Oil and gas major Santos on Thursday announced that the Barossa joint venture (JV), in which it owns a 25% interest, has entered into exclusive negotiations with the Darwin liquefied natural gas (LNG) JV, for the supply of backfill gas.
Santos is also a JV partner in Darwin LNG with an 11.5% interest.
The Barossa project entered the front-end engineering and design (FEED) phase of development in April last year, and last month announced the contract to supply the subsea production system (SPS) and associated SPS installation support.
Santos told shareholders on Thursday that the arrangement with Darwin LNG gave the Barossa JV an exclusive commercial negotiation period to reach a processing services agreement as well as settle on a tariff in anticipation of a final investment decision early next year.
“This exclusivity confirms the confidence we had to commit to long-lead items last month and maintain project schedule to deliver gas to Darwin LNG as early as possible,” Santos MD and CEO Kevin Gallagher said.
“Clearly, it also confirms Barossa’s status as the lead candidate for the supply of backfill gas to Darwin LNG.”
“Bids have also been received and are being evaluated for the floating production storage and offloading facility, gas export pipeline and development drilling. We’re getting on with the job.”
The Barossa gasfield, 300 km north of Darwin, sits within Santos’ Northern Australia portfolio, one of the company’s core long-life, natural gas asset regions.