JAKARTA (TheInsiderStories) – Italian Eni S.p.A through its subsidiary Eni Australia Ltd., and Santos Ltd., has signed a non-binding memorandum of understanding to jointly seek cooperation opportunities in the Barossa Project and the Evans Shoal development, said the company on Monday (05/03). Both also explore the potential expansion of Darwin LNG and options to repurpose and extend the life of Bayu – Undan areas in the Timor Sea.
CEO of Santos, Kevin Gallagher, explained the agreement built on the momentum for development of northern Australia following’ final investment decision announcement for the Barossa gas and condensate project and life extension for Darwin LNG for the next 20 years.
“Capturing and storing CO2 from industries in the Northern Territory will help it meet its net-zero emissions by 2050 target. We have approval for two more trains at Darwin LNG and we are open to third party gas opportunities,” he noted.
Both reported the potential joint development of CO2 capture and storage or utilization facilities, serving not only assets owned by the two but open to any interested third-party project in the Darwin area, with the long term objective of facilitating the creation of a CO2 management hub in the Northern Territory. In the areas and Timor-Leste, Eni and Santos are already partners in the Bayu – Undan gas and condensate field and in the associated Darwin LNG plant and connecting gas pipeline.
Eni is the operator of the Evans Shoal and Blacktip gas fields while Santos is the operator of the Caldita Barossa and Tern gas fields and has a participating interest in the Petrel gas field. They also assessed the potential collaboration in new upstream development opportunities in relation to other offshore stranded resources located in northern Australia.
For Eni, this collaboration is an important step in the pathway to decarbonising upstream activity in Australia. The Italian energy producer has launched a new strategy, which will lead the company to be carbon neutral by 2050 in all its operations, processes and products. In the long term, gas will represent more than 90 percent of its production.
In 2020, Santos had signed a letter of intent to sell a 12.5 percent interest in Barossa offshore development project to Japanese firm, JERA, make their ownerships increased from 6.1 percent to 18.6 percent interest in Darwin LNG Pty. Ltd. Gallagher said his company with JERA further builds partner alignment and follows the recent agreement to sell a 25 percent interest in Darwin LNG to SK E&S Co.Ltd.
The South Korean company already owns a 37.5 percent interest in the Barossa project. Earlier, Santos has agreed a A$390 million (US$248.41 million) deal to sell assets to SK E&S. The company will sell a 25 percent stake in the Darwin LNG and the Bayu – Undan gas field, located in offshore Northern Australia and has received around $120 million of cash flow from the interests.
Following the completion of the US-based ConocoPhillips‘ northern and Timor Leste acquisition and the sell-downs to JERA and SK E&S, Santos will hold a 43.4 percent interest in Darwin LNG and a 50 percent interest in Barossa. The Barossa Project is a gas and light condensate field located offshore about 300 kilometers north of Darwin, Northern Territory.
The Project is a Joint Venture between ConocoPhillips Australia Barossa Pty. Ltd. (37.5 percent), SK E&S Australia Pty. Ltd. (37.5 percent) and Santos Offshore Pty. Ltd. (25 percent). Barossa would ensure continued operation of the DLNG facility for a further 20 plus years, providing ongoing economic and social benefits to Darwin.
In March 2018, Timor-Leste and Australia signed a new treaty which established new maritime boundaries for the Timor Sea. When the treaty enters into force, the Bayu – Undan gas field will be entirely within Timor-Leste waters. While, Eni has been present in Australia since 2000 and Timor-Leste since 2006.
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