Australian DLNG’s ‘only gas supply’ option gets regulatory approval: Santos
The Darwin LNG export facility in Australia’s Northern Territory has had regulatory approval given to one project, Barossa-Caldita, that will be able to supply gas in time for the end of production at its current source of supply, the Bayu Undan field, Santos said Wednesday.
Australia’s National Offshore Petroleum Safety and Environmental Management Authority has accepted the Barossa-Caldita offshore project proposal, which sees it on course to move to FEED in the second quarter, the company said.
“This is one of the major regulatory steps leading to offshore project development and petroleum production, and it reinforces Barossa’s position as the only gas supply source capable of meeting Darwin LNG’s timetable,” Santos managing director and chief executive officer Kevin Gallagher said.
Santos holds a 25% interest in the Barossa-Caldita joint venture and is also a partner in Darwin LNG with an 11.5% interest.
ConocoPhillips, the operator of Darwin LNG/Bayu Undan as well as Barossa-Caldita, will still need to juggle the interests of the other DLNG participants.
“ConocoPhillips’ priority is to successfully backfill Darwin LNG from 2023. As Darwin LNG Operator, we will consider all viable options and seek to select the best value outcome in the interests of the Darwin LNG JV,” a spokesman for the company said.
Along with ConocoPhillips (56.94%) and Santos (11.5%) — INPEX (11.38%), Eni (10.99%) and Tokyo Timor Sea Resources (9.19%) have stakes in Bayu Undan/Darwin LNG. Of DLNG’s participants, only Santos and ConocoPhillips have interests in Barossa-Caldita, at 25% and 37.5% respectively. An affiliate of Korean conglomerate SK Group (37.5%) also has an interest in the latter.
The Woodside Petroleum-led Sunrise project has also been a candidate for future supply for DLNG, but this has long been complicated by a border dispute between Australia and Timor Leste.
The two countries recently signed treaty agreed that if the Greater Sunrise fields are developed by means of a pipeline to an LNG processing plant in Australia, the upstream revenue would be in the ratio of 20% to Australia and 80% to Timor Leste, and 30% to Australia and 70% to Timor Leste in the event of a pipeline to an LNG processing plant in Timor Leste.
“Barossa continues to progress well as a DLNG backfill option and we are on course to move the project to FEED in the second quarter of this year,” the ConocoPhillips spokesman said.
Bayu Undan gas is fully contracted to Darwin LNG until 2022 and there are three infill wells being drilled this year in order to extend the field’s life from around 2020 to roughly 2022 to provide a greater degree of production assurance, he said.
The Barossa development includes a permanently moored FPSO facility, subsea production system, supporting in-field subsea infrastructure in the field and a subsea gas export pipeline. It is proposed to connect the pipeline to the existing Bay Undan to Darwin pipeline which feeds into DLNG.