Santos takes FID on offshore pipeline duplication project
Australian energy company Santos, as the operator of the Barossa joint venture, has announced a final investment decision (FID) has been taken to proceed with the Darwin Pipeline Duplication Project, located offshore Australia’s Northern Territory.
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, Santos explained in a statement on Monday.
Santos entered the front-end engineering and design (FEED) phase of the Bayu-Undan CCS project back in March 2022. The phase includes engineering and design for additional CO2 processing capacity at DLNG. In addition, it includes the repurposing of the Bayu-Undan facilities for carbon sequestration operations after gas production ceases.
In July, it was announced that Worley would provide FEED services for the Bayu-Undan offshore facilities and pipeline, including the re-purposing of the Bayu-Undan facility and the offshore section of the gas export pipeline from hydrocarbons to carbon dioxide service.
Gas from the Barossa field, located 300 kilometres north of Darwin, is intended to replace the current supply from the Bayu-Undan facility located in Timor-Leste. First gas production at DLNG using Barossa gas is targeted for the first half of 2025.
Santos Managing Director and Chief Executive Officer, Kevin Gallagher, said the DLNG Life Extension, Darwin Pipeline Duplication and Bayu-Undan CCS projects would promote sustainable development and jobs growth in the Northern Territory and Timor-Leste while building momentum for a whole of region carbon reduction solution.
“Taking FID on the Darwin Pipeline Duplication Project will allow for the Barossa project to be CCS ready,” Gallagher said.
“The Bayu-Undan CCS project has the potential to capture and store up to 10 million tonnes of carbon dioxide per annum, equivalent to about 1.5 per cent 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.
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.
Work on the Darwin Pipeline Duplication project is scheduled to begin in 2023, subject to Commonwealth and NT regulatory approvals.
A final investment decision on Bayu-Undan CCS is targeted for 2023. Santos noted it continues to work with the Australian and Timor-Leste governments to establish regulatory frameworks to support future CCS operations.
It is worth reminding that a group of Indigenous Australians has recently launched a legal challenge in an attempt to block Santos from developing its operated Barossa gas field. Tiwi Islanders from the Northern Territory’s Tiwi Islands are claiming they have not been adequately consulted about the Barossa gas project, the pipeline of which will run through Tiwi sea country.