ADELAIDE, Australia – Santos has signed a long-term LNG supply and purchase agreement for the Barossa gas/condensate project offshore Northern Australia with Mitsubishi subsidiary Diamond Gas International.
The contracted quantity of 1.5 MM metric tons/yr (1.65 MM tons) applies for 10 years, with extension options.
There could be further LNG transactions via ‘commercial flexibilities’ negotiated between the two companies.
Santos is targeting a final investment decision on the Barossa field development for the first half of 2021.
Managing director and CEO Kevin Gallagher said the deal was the company’s first long-term equity LNG sale from one of its major LNG projects. In addition, Santos and Mitsubishi have signed a memorandum of understanding to assess opportunities for carbon neutral LNG from Barossa.
These include Santos’ Moomba carbon capture and storage project, pursuit of carbon neutral LNG, bilateral agreements for carbon credits, and potential future development of zero-emissions hydrogen.
Moomba, in the Cooper basin (onshore SW Queensland and NE South Australia) will have the capacity to permanently store 1.7 MM metric tons /yr (1.87 MM tons) of CO2 deep underground in depleted natural gas reservoirs, subject to government approval concerning eligibility for Australian Carbon Credit Units.