PERTH (miningweekly.com) – Oil and gas major Santos on Wednesday said that its $2.6-billion Barossa project is running on schedule and within budget, and is now about 15% complete.
First gas from Barossa is targeted for the first half of 2025.
“The timing could not be better,” CEO Kevin Gallagher said on Wednesday.
“A spike in energy demand as the world opens up after Covid and a supply shortage has seen liquefied natural gas (LNG) spot prices go to record highs of nearly $60 per million British thermal units this month.
“This has shaken energy markets in Britain, Europe and parts of Asia, reminding everyone that gas remains a very important part of the energy mix, and I believe it will continue to be so for at least the next two decades.
“This is good for the Northern Territory and good for Australia with Barossa being one of the lowest-cost new LNG supply projects in the world - a great competitive advantage to have,” Gallagher said.
Work on the floating production, storage and offloading (FPSO) started in July this year, following the award of a construction, connection and operation contract to international vessel builder and operator BW Offshore.
The FPSO is being built in South Korea and Singapore before being towed and permanently located in the field where it would process natural gas prior to its transport via pipeline to Darwin LNG.
The Barossa joint venture will provide the next gas source for the existing Santos-operated Darwin LNG plant, once current reserves from the Bayu-Undan field, in the Timor Sea, have been depleted.
“With much more activity to come in the lead-up to Barossa first gas, preliminary civil work to prepare for the Darwin LNG life extension project has commenced. We have also been working onshore in the McArthur basin, drilling a horizontal well at Tanumbirini that encountered excellent gas shows,” Gallagher said on Wednesday.
“A second well, Tanumbirini 3H, was spudded from the same drill pad on August 23, and we are looking forward to production testing of both wells which will prove up the potential of this exciting basin.”