Santos (ASX:STO) today announced investment approval for its US$622 million Darwin Pipeline Duplication Project, located offshore Australia’s Northern Territory, as part of its Barossa gas development that will backfill Darwin LNG.
“The decision will extend the Barossa Gas Export Pipeline to the Santos-operated Darwin LNG (DLNG) facility and allow for the repurposing of the existing Bayu-Undan to Darwin pipeline to facilitate carbon capture and storage (CCS) options,” said Santos.
Gas from the Barossa field, located 300 kilometres north of Darwin, is intended to replace the current supply from the Bayu-Undan facility located offshore East Timor, also known as Timor-Leste. First gas production at DLNG using Barossa gas is targeted for the first half of 2025, added the company.
“Taking FID on the Darwin Pipeline Duplication Project will allow for the Barossa project to be CCS ready,” said Santos chief executive Kevin Gallagher .
“The Bayu-Undan CCS project has the potential to capture and store up to 10 million tonnes of carbon dioxide (CO2) per annum, equivalent to about 1.5% of Australia’s carbon emissions each year from other projects, customers and other hard to abate industries and has the potential to be the largest CCS project in the world.”
Adding the Darwin Pipeline Duplication project is estimated to increase Santos’ share of capital expenditure for the Barossa project by approximately US$311 million.
Barossa project stakeholders are Santos (50% and operator), SK E&S (37.5%) and JERA (12.5%). Darwin LNG partners are Santos (43.4% and operator), SK E&S (25%), INPEX (11.4%), Eni (11%), JERA (6.1%) and Tokyo Gas (3.1%).
The Barossa joint venture has agreed with the DLNG joint venture partners to terminate the toll arrangement for using the original Bayu-Undan to DLNG pipeline, reducing operating expenses for Barossa, said Santos.
Work is scheduled to commence on the Darwin Pipeline Duplication project in 2023, subject to Commonwealth and NT regulatory approvals.
A final investment decision (FID) on Bayu-Undan CCS is targeted for 2023. Santos continues to work with Australian and Timor-Leste governments to establish regulatory frameworks to support future CCS operations, added the company.