Oil and gas producer Santos Ltd on Tuesday approved the final investment decision (FID) on the $3.6 billion Barossa offshore gas and condensate project in the Northern Territory.
The Barossa project is expected to help provide gas to the company's Darwin LNG plant after current reserves from the Bayu-Undan field in the Timor Sea run dry in the next two years.
Santos said the approval would also kick-start a $600 million investment into the Darwin LNG plant that is expected to extend the facility's life by 20 years.
The company had deferred the FID on Barossa from the March 2020 quarter due to a pandemic-induced oil price crash. It is now targeting gas output from the project in the first half of 2025.
The investment decision was also the final condition for Santos to sell a 25% stake in the Darwin LNG and Bayu-Undan projects to South Korean utility company SK E&S, which also jointly owns the Barossa project.
The stake sale is expected to result in net proceeds of about $200 million to Santos, the company said.
(Reporting by Soumyajit Saha in Bengaluru; Editing by Vinay Dwivedi)
