Santos has announced that the Barossa Joint Venture has entered into exclusive negotiations with the Darwin LNG Joint Venture for the supply of backfill gas.

The arrangement gives the Barossa JV an exclusive commercial negotiation period to reach a processing services agreement, as well as settle on a tariff in anticipation of a Final Investment Decision early next year.

The Barossa project entered the front-end engineering and design phase of development in April 2018, and announced the contract to supply the Subsea Production System (SPS) and associated SPS installation support in May 2019.

Santos Managing Director and Chief Executive Officer, Kevin Gallagher, said the exclusivity confirms the confidence Santos had to commit to long-lead items and maintain project schedule to deliver gas to Darwin LNG as early as possible.

“Clearly, it also confirms Barossa’s status as the lead candidate for the supply of backfill gas to Darwin LNG,” Mr Gallagher said.

“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.”

The Barossa gas field, 300km north of Darwin, sits within Santos’ Northern Australia portfolio, one of the company’s core long-life, natural gas asset regions.

The project area encompasses petroleum permit NT/RL5 and, with future-phased development in the Caldita field to the south, petroleum permit NT/RL6.   

Santos holds a 25 per cent interest in the Barossa-Caldita joint venture along with partners ConocoPhillips (37.5 per cent and operator) and SK E&S (37.5 per cent).

Santos is also a joint venture partner in Darwin LNG with an 11.5 per cent interest.

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