‘Major milestone’ for Australian project: Santos unveils first gas from BW Offshore FPSO

Australian energy player Santos has revealed the beginning of production operations related to a floating production, storage, and offloading (FPSO), which is managed by Norway’s BW Offshore and deployed at its project off the coast of Australia’s Northern Territory.

Following a naming ceremony in February 2025, three months after BW Offshore disclosed that its FPSO construction project was facing cost overruns, the FPSO BW Opal left Seatrium’s Tuas Boulevard Yard in May 2025 to go to the Santos-operated Barossa field offshore Australia.

According to the Australian field operator and the Norwegian firm, the FPSO achieved first gas on September 20, after reaching the ready for start-up (RFSU) phase for the Barossa LNG project on September 16, initiating 60% of the contractual day rate under the charter.

BW Offshore sees first gas as a critical juncture in the formal transition from project to operations phase, demonstrating the FPSO BW Opal’s readiness to deliver stable energy production. The next step, the interim performance test (IPT), will increase the payable day rate to 85%.

The last move, practical completion (PC), is the step that will conclude the delivery phase, in the Norwegian firm’s mind, triggering 100% of the day rate, and marking the commencement of the 15-year firm contract period, securing long-term revenues for the company under the charter agreement.

Designed to process 850 million standard cubic feet per day (mmscfd) of gas and a capacity of 11,000 barrels per day of stabilized condensate, the FPSO will operate at the Barossa gas field, located 285 kilometers offshore Darwin in the Northern Territory of Australia, unlocking the resource potential of the field for years to come.

Marco Beenen, CEO of BW Offshore, commented: “Reaching first gas on BW Opal is a tremendous achievement and a testament to the hard work, dedication, and collaboration of our teams, contractors, and partners. It demonstrates our commitment to delivering complex projects safely and efficiently, while supporting energy security and value creation for our stakeholders.”

Santos perceives the first gas from the FPSO as “a major milestone” not just for itself, but also for its Barossa joint venture partners, Prism Energy Australia and Jera Australia, in delivering this LNG project. Thanks to this achievement, the Australian operator underlines that all six wells drilled at the gas field have intersected excellent reservoir quality.

As testing has been completed on five of the six wells, this is interpreted as demonstrating outstanding flow capacity that exceeds pre-drill estimates, with expected average potential well deliverability of around 300 million standard cubic feet per day to sustain long-term production.

The Northern Territory Environment Protection Authority has renewed the environmental protection license for Darwin LNG, starting September 19, 2025, paving the way for first gas and start-up of the Darwin LNG plant. The FPSO has a gas handling capacity of 850 million standard cubic feet per day and a condensate handling capacity of 11,000 barrels per day.

Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, commented: “RFSU for the BW Opal marked the formal transition from project execution to production operations, following RFSU for the Darwin LNG plant upon completion of the life extension work scope and the commencement of production from the offshore subsea wells.

“First gas into the FPSO is an important step for the project and a credit to the hard work of our people and support from our partners. It puts us on track to deliver reliable energy to our customers and long-term value to our shareholders from Barossa LNG.”

The FPSO will be permanently situated at the Barossa gas field, approximately 285 kilometers offshore Darwin in the Northern Territory of Australia, to feed the Darwin LNG plant for the next two decades. The unit features a 358-meter hull and accommodation for up to 140 personnel.

With RFSU of the FPSO BW Opal, Santos will recognize a lease liability of around $665 million and a right-of-use asset value of about $1.4 billion, comprising the lease liability, FPSO pre-payment, and other direct costs. The impact of the operating lease liability is expected to increase gearing by around 2.4% points.

Santos underlines that the combined-cycle power generation, incorporating waste heat recovery and steam turbine technology, was used to maximize energy efficiency. This is expected to curb non-reservoir emissions by over 50% – more than 0.75 million tonnes of CO2e per year – compared to the offshore project proposal accepted by NOPSEMA.

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