Santos moves forward for its Barossa project in the Timor sea worth $US3.6 billion as they signed a long-term LNG supply and purchase agreement (SPA) with Mitsubishi for the sale of most of its LNG. Both companies agree that this is a significant milestone for the LNG segment but also for future opportunities.
The Australian energy pioneer will source 1.5 million tons of LNG per annum from the Australian offshore project for an initial period of 10 years with possibilities to extend. The announcement of this contract will support in accomplishing a final investment decision (FID) on Barossa, now expected in the first half of 2021, the first gas is expected in 2025.
Santos CEO Kevin Gallagher said, “Santos is delighted to establish a long-term relationship with Mitsubishi, a major Japanese company with deep LNG expertise.” The project went on hold earlier this year due to the start of Covid-19, prior to this, main contractors had been chosen (Modec for the FPSO, Allseas for the subsea gas export pipeline, and TechnipFMC for the subsea production system).
In addition to the SPA, both companies have signed a Memorandum of Understanding to jointly research opportunities for carbon-neutral LNG from Barossa, including Moomba carbon capture and storage project which has received FID.
Santos currently holds 62.5% interest in the joint venture alongside partner SK E&S which holds 37.5%.
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by Ana Aspe