Santos confident Barossa project will resume work this year
The gas giant’s $6bn Barossa project is expected to resume later this year and deliver a huge economic boost along the way. Read what the company’s CEO says it will bring.
Northern Territory
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The Territory is set for a massive wet season economic surge with hundreds of local and international workers due to arrive when energy company Santos ramps up its Barossa project works schedule later this year.
Santos chief executive Kevin Gallagher breathed life back into the stalled LNG project on Wednesday with a speech at the SEAAOC conference that focused on the economic and environmental benefits of the $6bn project.
The Barossa gas project in the Timor Sea stalled last year when the federal court ruled offshore energy regulator NOPSEMA had approved the project without proper community consultation with Tiwi Islanders.
At its closest point, a pipeline connecting the Barossa field with Darwin will pass 7km from Melville Island, with a processing plant 140km north of Seagull Island on Melville Island’s northwest coast.
The project has been delayed while Santos embarked on an extensive round of consultations with Traditional Owners, with Mr Gallagher saying in Darwin on Wednesday he is confident approvals will be granted and work will resume later this year.
The company is understood to have spent about $350m while the drill rig sat idle.
The NT Government expects the Barossa gas project to deliver $2.5bn in wages and contracts to local workers and businesses.
“Santos’ Barossa gas project is 66 per cent complete, excluding the Darwin pipeline duplication project and would be further advanced but for a climate activist-led campaign to stop the Barossa Gas Project and undermine the regulator NOPSEMA,” Mr Gallagher said on Wednesday.
“This is despite the fact that, from day one, Barossa will offset 100 per cent of its reservoir CO2 emissions.
“Combined with proximity to Asian markets – which means shipping emissions are low compared to other LNG projects – this will make Barossa one of the lowest carbon intensity projects in the world – from day one.”
“Notwithstanding the efforts of our opponents, we are focused on meeting our consultation obligations with First Nations people for our drilling environment plan and complying with the general direction from NOPSEMA.”
Santos has been undertaking underwater cultural heritage surveys along the Barossa gas export pipeline route to the junction with the Bayu-Undan pipeline about 130km offshore from Darwin.
When that work is completed, Mr Gallagher said Santos would aim to recommence drilling and start pipe laying before the end of the year.
This will involve a four-month offshore construction campaign with 500 Australian crew and about 300 expat crew and technical support personnel out of Europe, requiring about 340 Darwin hotel rooms.
“Ninety people will change out every week during pipe laying – that’s 180 people every week travelling in and out of the Territory on planes, staying in Darwin hotels, eating at local restaurants and using cabs and Ubers,” he said.
“I have no doubt there will be more attempts from anti-fossil fuel activists to stop Barossa but this project is far too important for Darwin and the Territory for us to take a backward step.”
With Bayu-Undan gas production ending this year, Barossa will supply the Darwin LNG plant from 2025 following a $925m life extension program on the old Conoco Phillips processing facility that will employ more than 300 construction and maintenance workers over the next 18 months.
“This will provide opportunities for local engineering firms and many other businesses who will also employ local workers,” Mr Gallagher said.
Darwin LNG generates about $100m a year for Territory businesses and a maintenance shutdown every four years brings another 600 jobs and $50m through the economy.
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