Santos starts up Scotia project, sells Denison assets

Australia’s LNG player Santos has completed the commissioning and start-up of the Scotia CF1 project in Queensland, with initial full field production exceeding 40 TJ/day, in line with expectations.

The project, situated in the Bowen Basin, 340 km northwest of Brisbane, will supply about 70 TJ/day at peak production in late 2019, significantly boosting gas supply to the Santos GLNG project and benefiting both the east coast domestic gas and export LNG markets.

Santos managing director and CEO Kevin Gallagher said, “the project was estimated to cost A$493 million, but the team has delivered it for A$416 million, sixteen percent under budget.”

Site infrastructure is also running three months ahead of schedule and some of the well completions are a year ahead of time, he said.

Santos Sells Denison Assets

Santos also completed the sale of its non-core Denison Trough assets in Queensland to Orient (Denison Trough), owned by a consortium of Shandong Order Gas Company and Orient Energy, for up to A$43 million.

The assets sold comprise Santos’ 50 percent non-operated interests in the Denison conventional assets as well as ATP 1177.

Santos has received A$22 million in cash at completion and is entitled to further contingent payments of up to A$21 million if certain milestones are achieved by the purchaser.

Santos expects to record a profit on sale at the completion of approximately A$70 million.

Gallagher added the sale of the Denison assets is consistent with Santos’ ongoing strategy to realize value from its non-core assets.