Australian field gets its ‘production centerpiece’ with FPSO arrival

A floating production, storage, and offloading (FPSO) vessel operated by Norway’s BW Offshore has arrived at a field offshore Australia’s Northern Territory, the operator of which is the country’s oil and gas player, Santos.

BW Opal reached the Barossa field in Northern Australia on June 15, as reported by Santos and BW Offshore. The vessel has since been hooked up to subsea facilities, marking a key transition from construction to offshore operations.

Final commissioning activities are said to be progressing according to plan, and first gas is targeted in Q3 2025. Santos describes the FPSO as the production centerpiece of its Barossa LNG project, a joint venture between Santos (50%), SK E&S (32.5%), and JERA (12.5%).

The unit was towed from Singapore to Northern Australia following sail-away from Seatrium’s Tuas Boulevard Yard on May 28. Featuring what the operator behind the tow, PACC Offshore Services Holdings (POSH), says is one of the largest FPSO hulls ever built, the unit travelled across open seas thanks to three ocean-going tugs: POSH Champion, POSH Commander, and POSH Teal.

“The arrival of the BW Opal FPSO into the Barossa field and commencement of hook up and commissioning is a significant milestone for Santos and its Barossa LNG joint venture partners. The project has come a long way since regulator acceptance of the Offshore Project Proposal in 2018. The project remains on track for first gas in the third quarter of 2025, and within the original cost guidance, which is a remarkable achievement,” noted Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher.

The Australian player said that five wells of the six-well program have been drilled. The fifth well is being prepared for flow testing, while the final well is expected to be completed in Q3. The gas and condensate from these will be processed at FPSO BW Opal.

Condensate will be exported via tankers, and natural gas transported via the Gas Export Pipeline (GEP) to the Darwin LNG plant, which will be tied into the existing Bayu-Undan pipeline. The 262-kilometer GEP and 123-kilometer Darwin Pipeline Duplication are said to be complete, in addition to the subsea infrastructure required for first gas.

“Barossa is a world class asset and, together with the Pikka phase one project in Alaska, is expected to deliver a 30 per cent increase in production over the next eighteen months or so compared to 2024. These projects will set the company up with long-term, stable cash flows to underpin compelling shareholder returns,” added Gallagher.

Darwin LNG used to receive gas from the Bayu-Undan field in the Timor Sea and convert it into LNG for sale to overseas markets from its commissioning in 2006 until LNG production from the field stopped in late 2023.

Thanks to feed gas from Barossa, Darwin LNG is set to get a new lease on life as part of its life extension project. As 90% of its scope is now complete, Santos expects the life extension portion of work on its part to be completed in early Q3 2025.

In addition to this milestone, Santos disclosed earlier this week that it received a final, non-binding indicative offer from a consortium led by XRG, a subsidiary of ADNOC, to purchase all of the ordinary shares issued by Santos for a cash offer price of $5.761.

The Australian firm’s board considers the offer to be fair and reasonable, which is why it intends to unanimously recommend that the company shareholders vote in favor of the transaction, unless a superior proposal is made.