Santos Ltd., Adelaide, has agreed to sell a 25% interest in Darwin LNG plant and Bayu Undan gas field in the Timor Sea for $390 million to SK E&S.
The deal, which takes effect from Oct. 1, 2019, is conditional on completion by Santos of the acquisition of ConocoPhillips’ northern Australian and Timor Leste portfolio reported in October 2019 (OGJ Online, Oct. 14, 2019). It also depends on third party consents, regulatory approvals, and a final investment decision on development of the Barossa project also in the Timor Sea north of Darwin (OGJ Online, Mar. 21, 2018).
SK E&S of South Korea currently has a 37.5% interest in the Barossa project that is designed to backfill Darwin LNG as supplies from Bayu Undan wane.
Santos chief executive officer Kevin Gallagher said discussions to sell down its equity in Barossa to a target ownership of about 40% are advanced. The sell down is designed to bring about partner alignment.
A final investment decision for Barossa development is expected following completion of the ConocoPhillips acquisition and once all necessary technical, engineering, and commercial contracts are in place, including the processing agreement with Darwin LNG.
