ConocoPhillips has ceded its share of the LNG landscape in northwestern Australia, including Darwin LNG, to independent Australian oil and gas company Santos Ltd
A US$1.4Bn deal will see Australian independent oil and gas producer Santos Ltd take over ConocoPhillips’ operating interests in Darwin LNG, Bayu-Undan, Barossa and Poseidon.
The deal also includes payment of a further US$75M upon Santos’ FID in the Barossa project.
Santos chief executive Kevin Gallagher said the company had enjoyed a long-established relationship with ConocoPhillips, which has operated Santos’ northern Australia natural gas assets since the companies became founding partners in Darwin LNG, in 2006.
“This acquisition delivers operatorship and control of strategic LNG infrastructure at Darwin, with approvals in place supporting expansion to 10 mta, and the low-cost, long-life Barossa gas project," Mr Gallagher said in a statement.
“It also continues to strengthen our offshore operating and development expertise and capabilities to drive growth in offshore northern and western Australia.”
Mr Gallagher said Santos is in discussions with existing Darwin LNG joint-venture partners to sell equity in Barossa and further equity in Darwin LNG. Santos is also negotiating with LNG buyers for offtake volumes.
The company said it will target contracting approximately 60-80% of LNG volumes for more than 10 years before taking a final investment decision on Barossa, which is expected by early 2020.
Barossa is a backfill project that could extend the viable production lifetime of Australia’s Darwin LNG export terminal by more than 20 years.
"Discussions to date have demonstrated strong interest in Barossa LNG, given it is a brownfield upstream development located close to North Asian demand,” Mr Gallagher said.
A statement from ConocoPhillips said the sale is expected to complete in Q1 2020. With an FID on Barossa expected in early 2020, first LNG from the project is expected in 2024.
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