Santos expects increased production amid NT expansion plans

The energy group, led by Kevin Gallagher, expects production to jump next year as a major growth project comes online.

Moomba CCS. Picture: Supplied

Santos expects production next year to jump nearly 8 per cent as a key growth project comes online.

The South Australia oil and gas company said it will explore growth opportunities such as expanding its Northern Territory LNG facility and storing imported carbon dioxide.

The outlook will please investors that Santos is poised to unlock converted growth and ignite a share price rally that shareholders have increasingly been angling for.

Santos said it expects to produce 90-97 million barrels of oil equivalent during 2025 – up from the 84-90MMBoe it expects to report at its annual results next month.

Much of the increase will come from Santos’ $5.4bn Barossa development, which will see first gas produced in the third quarter of 2025.

Santos said the project is now almost 90 per cent complete and advancing to its final stages.

Santos will subsequently bring online its Alaskan oil project, known as Pikka, which it said was nearly 75 per cent complete.

The two developments are the centrepiece of Santos’ growth strategy, and it has indicated it will begin to slow capital expenditure afterwards in order to increase returns to shareholders.

Santos is poised to finish work on its controversial Barossa LNG project this year. Picture: Tamati Smith/Getty Images

Chief executive Kevin Gallagher last year said Santos would return at least 60 per cent of free cashflow to investors from 2026, up from the previous target of 40 per cent.

But following the South Australian oil and gas company’s fourth quarter result, small cap gas company Tamboran Resources said it had entered a non-binding agreement with Santos to study a potential expansion of Darwin LNG. A second LNG train would use gas from a permit that is 75 per cent owned by Santos and 25 per cent by Tamboran.

Speaking broadly about Santos’ growth opportunities, Mr Gallagher vowed the company would be disciplined in future growth opportunities.

“These options will be progressed in accordance with our disciplined capital allocation framework, at the right time to backfill and expand production, and in a way that delivers maximum value for shareholders,” he said.

Santos is also exploring growth in its carbon capture and storage business. The company last year said it had begun injecting captured carbon dioxide into depleted reservoirs and Santos on Thursday revealed the Moomba project had full capacity in October and stored almost 340,000 tonnes of CO₂ in the quarter.

“At full injection rate, Moomba CCS avoids more emissions every four days than 10,000 electric cars avoid in one year,” Mr Gallagher said.

Santos could also look to expand Moomba and store internationally captured CO2. In October, Santos signed an early stage agreement with Japanese utility Chubu Electric Power to assess the feasibility of transporting CO2 from the proposed Nagoya CO2 aggregation hub to Moomba for permanent storage as part of a future expansion project.

Originally published as Santos expects increased production amid NT expansion plans