31 Mar Santos green lights $3.6 billion Barossa offshore gas project in Australia
Santos has approved the development of its US$3.6 billion Barossa gas project off the coast of Darwin, after putting the plans on hold last year due to the COVID-driven market crash.
The Australian oil and gas producer said that the green light will also kickstart a $600 million investment in the Darwin LNG plant’s life extension and pipeline projects, which will extend the facility life for around 20 years.
“As the economy re-emerges from the COVID-19 lockdowns, these job-creating and sustaining projects are critical for Australia, also unlocking new business opportunities and export income for the nation,” Santos managing director Kevin Gallagher said.
“The Barossa and Darwin life extension projects are good for the economy and good for local jobs and business opportunities in the Northern Territory.”
Last year, Santos and other ASX-listed oil and gas firms were compelled to make big cuts to expenditure budgets and reduce drilling and growth plans, as the pandemic destroyed demand and prices.
As a result, Australia’s LNG exports fell from A$50 billion to A$33 billion in 2020, but benchmark prices for LNG cargoes have begun to bounce back in Asia, which is leading the global economic recovery from COVID-19.
Santos has faced scrutiny from investors and climate campaigners relating to the high levels of carbon dioxide in the Barossa field. Wood Mackenzie analyst Shaun Brady said Santos would need to deliver on energy efficiency projects and its proposed Moomba carbon capture and storage facility to offset the added emissions.