Santos has locked in an US$800 million loan to proceed with the life extension works of its planned Darwin liquified natural gas (LNG) plant in the NT.  

This comes after the firm sought approval to extract oil and gas from the Barossa field - a new energy source to feed the Darwin LNG plant as the Bayu-Undan gas field in the Timor Sea is drying up.   

Santos CEO Kevin Gallagher said this is an excellent result for the Darwin LNG project.  

"The debt raised by the Darwin LNG joint venture is wholly consistent with our strategy of securing flexible, long-duration and competitively priced funding," he noted.  

"With these facilities in place, Darwin LNG is well-funded to complete the life extension works scheduled for mid-2025. 

"It positions Darwin LNG to consider future expansion of this important infrastructure, including through the potential provision of third-party carbon capture services in Darwin." 

Santos told its shareholders today that the new syndicated bank loan facilities comprise a US$350 million 7-year, partially amortising loan maturing in 2031 and a US$450 million 12-year partially amortising loan maturing in 2036.  

According to Santos, following the end of LNG production from the Bayu-Undan field in late 2023, DLNG is undertaking works to extend its design life and provide gas processing and marine loading services to the Barossa joint venture, around 300km north of Darwin.  

Santos owns a 43.43% stake in the Darwin LNG project, while other oil and gas majors SK E&S holds 25%, INPEX 11.4%, Eni (11%), and Japan's JERA (6.1%) and Tokyo Gas (3.1%).  

Santos approved to wind down the Bayu-Undan to Darwin gas pipeline 

In July, Santo confirmed the 502km gas export pipeline connecting the Bayu-Undan gas field and Darwin LNG plant would enter a preservation phase once the gas from the field no longer powers the Bayu-Undan Central Processing Facility.   

During this phase, which is expected to last around 12 to 36 months, the pipeline will be filled with reservoir gas until Santos decides whether to repurpose it for carbon capture and storage or decommission it.   

Meanwhile, Santos plans to drill at least six subsea wells to pump gas from the Barossa gas field and transport it to the Darwin LNG facility via a gas export pipeline.  

Australia's offshore energy regulator is currently assessing the proposal.  

Source: Energy News Bulletin