SANTOS confirmed late yesterday the Barossa field would supply backfill gas the Darwin LNG plant it shares with ConocoPhillips, announcing it had entered exclusive commercial negotiations period in order to reach a processing services agreement and settle on a tariff.
Santos expects a final investment decision next year.
Barossa entered front-end engineering and design in April last year, and last month Santos announced the contract to supply the subsea production system and associated installation support had been awarded.
"This exclusivity confirms the confidence we had to commit to long-lead items last month and maintain project schedule to deliver gas to DLNG as early as possible," Santos managing director and CEO Kevin Gallagher said.
"Clearly, it also confirms Barossa's status as the lead candidate for the supply of backfill gas to Darwin LNG.
"Bids have also been received and are being evaluated for the FPSO, gas export pipeline and development drilling. We're getting on with the job."
Barossa is 300km north of Darwin, and will replace the declining Bayu-Undan field in feeding the plant. That oil and gas field is one of Timor-Leste's main sources revenue.
Eni's Evans Shoal field was another candidate for DLNG backfill though most have long though Barossa would eventually be chosen.
The Barossa joint venture is made up of operator ConocoPhillips (37.5%), SK E&S (37.5%) and Santos (25%) and Darwin LNG of ConocoPhillips (57% and operator), Santos (11.5%) Inpex (11%) Eni (11%) and Tokyo Timor Sea Resources (10%).
The plant is expected to be offline for 18 months or more once Bayu-Undan ceases production and Barossa comes online with a probable start up around 2024.