You are using an outdated browser. Please upgrade your browser to improve your experience.



Santos’ decision to proceed with $5.6 billion worth of investment in Northern Australia will create hundreds of jobs during construction and sustain a further 350 jobs for next 20 years at the Darwin LNG facility

The final investment decision (FID) on the Barossa gas project, located offshore the Northern Territory, clears the way for an investment boom in the north.

The $4.8 billion Barossa gas project kickstarts the $800 million investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for about 20 years.

Joining Santos’ Chief Executive Officer and Managing Director Kevin Gallagher to make the announcement in Darwin was Federal Minister for Resources, Water and Northern Australia Keith Pitt and Northern Territory Deputy Chief Minister and Minister for Mining and Industry Nicole Manison.

Mr Gallagher says the final investment decision means “jobs, jobs, jobs” for the Northern Territory and confirmed Santos’ long-term commitment to the Top End.

“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,” he says.

“The Barossa and Darwin life extension projects are good for the economy and good for local jobs and business opportunities in the Northern Territory.

“Barossa and Darwin LNG life extension will create 600 jobs throughout the construction phase and secure 350 jobs for the next 20 years of production at the Darwin LNG facility.”

Minister Pitt congratulated all involved on the project.

“The final investment decision for the Barossa project is a tremendous show of confidence in the long-term future of Australia’s resource sector,” he says.

“Progress on the Barossa project means new investment, economic growth and development in the Northern Territory, and for Australia.

Minister Pitt also specifically called out Santos’ commitment to have its Northern Territory workforce live locally.

“As the Minister for Northern Australia, the undertaking provided by Santos that operational staff will be based in the Northern Territory is especially welcomed – ensuring that more of the benefits flowing from the project are captured here in the Territory.”

Minister Manison says the announcement shows strong confidence in the Territory and in Territory jobs.

“We remain focused on creating jobs and making the Territory the very best place to do business,” she says.

“Private investment is so important for our comeback from the coronavirus crisis, and we will continue to support this sector which creates opportunities and jobs for Territorians.”

Santos says Barossa is one of the lowest-cost new LNG supply projects in the world and will give the company and Darwin LNG a competitive advantage in a tightening global LNG market.

The project represents the biggest investment in Australia’s oil and gas sector since 2012.

Mr Gallagher says FID on Barossa is consistent with Santos’ strategy for disciplined growth using existing infrastructure around the company’s core assets.

“Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter this next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model,” he says.

“Despite the global economic impact of a once-in-a-hundred-year pandemic, it is a great achievement to have extended the life of Bayu-Undan following the approval of the infill drilling program and now to have taken FID on the Barossa project. I’d like to thank the Australian, Northern Territory and Timor-Leste governments, our joint venture partners and our customers for their support.”

The Barossa development will comprise a Floating Production, Storage and Offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline. First gas production is targeted for the first half of 2025.

At the end of last year, Santos announced the tolling arrangements had been finalised for Barossa gas to be processed through Darwin LNG and that Santos had signed a long-term LNG sales agreement with Diamond Gas International, a wholly owned subsidiary of Mitsubishi Corporation, for 1.5 million tonnes of Santos-equity LNG for 10 years with extension options.

Santos has also signed Memoranda of Understanding with SK E&S and Mitsubishi to jointly investigate opportunities for carbon-neutral LNG from Barossa, including collaboration relating to Santos’ Moomba CCS project, bilateral agreements for carbon credits and potential future development of zero-emissions hydrogen.

“We will continue to explore the potential for carbon-neutral LNG from Barossa as part of our commitment to lower global emissions and as a company, reach our net-zero emissions target by 2040,” Mr Gallagher says.