Adelaide-based Santos Ltd.—operator for the proposed Barossa natural gas and LNG project in the Timor Sea—has let a contract for the development’s floating production, storage, and offloading vessel to Modec International Inc.
The contract comprises engineering, procurement of materials, equipment, and services as well as construction, installation, commissioning, and testing of the facility.
Santos said the contract award is a major step towards a final investment decision.
Currently, work is nearing the end of the front-end engineering and design phase that includes the FPSO, subsea wells, and a subsea production system and gas export pipeline.
The FPSO will be moored in Barossa field 300 km north of Darwin and export gas to Darwin LNG plant via a 260-km subsea pipeline that ties in to the existing Bayu-Undan-Darwin pipeline. The FPSO also will store condensate extracted from the gas stream for periodic offload to tankers.
The contract with Modec is a result of a FEED competition and represents the largest step so far towards the start of development of Barossa and nearby Caldita fields, said Kevin Gallagher, Santos managing director and chief executive officer.
“The project is technically and commercially robust and we are closing in on FID early in 2020, with contracts for the subsea umbilicals, flowlines, and drilling of six subsea production wells to be awarded in the near future,” Gallagher said. Barossa lies in retention lease NT/RL5.
Santos holds a 25% interest in the Barossa joint venture, along with current operator ConocoPhillips 37.5% and SK E&S, also with 37.5%. Santos also is part of the Darwin LNG joint venture with 11.5%.
Santos will take over the operatorship as well as ConocoPhillips’ share in the project and the LNG plant upon completion of a $1.5-billion deal announced earlier this month (OGJ Online, Oct. 14, 2019). Santos plans to sell down some of the bought interests to SK E&S such that in the final analysis Santos will hold 43.4% of Darwin LNG, 62.5% of Barossa-Caldita, and 43.4% of Bayu-Undan fields.
Santos said it expects to bring the Barossa project on stream in 2024. Development costs are put at $4.7 billion.
The project is expected to extend the life of the Darwin LNG plant by more than 20 years. Planning approvals are in place for an expansion to 10 million tonnes/year of LNG.
