First Condensate Cargo Completed from Bayu-Undan

Santos Limited announced another significant achievement in the development of the US$1.8 billion liquids phase of the Bayu-Undan project in the Timor Sea.

The project operator, ConocoPhillips, has advised that the first shipment of 340,000 barrels (gross) of condensate destined for the Asian market from the Bayu-Undan development project was completed on 30 March 2004.

The commencement of condensate cargo shipments will be followed next month (April) by the start of gas re-injection, in line with the project schedule.

The first LPG cargo is scheduled for shipment in late May.

"Bayu-Undan is of great significance to Santos and, as our first entry into the international LNG market, will, at its peak, add over 6 million barrels to our annual production," said Santos Managing Director, Mr. John Ellice-Flint.

"It is therefore exciting and most pleasing that the various stages of this complex, world-scale development continue to come in on schedule," he said.

The US$1.8 billion gas recycle (liquids) stage of the US$3.3 billion Bayu-Undan project involves the stripping of natural gas liquids (condensate and LPG) from the field's gas stream and re-injecting the residual gas.

The residual gas from the liquids project is reinjected into the gas reservoir via dedicated wells for future use in the second stage LNG development.

The LNG project is expected to commence production in the first quarter of 2006 and involves the transportation of residual dry gas via a sub-sea pipeline to Wickham Point, Darwin in the Northern Territory for processing into LNG for export to Japan. The LNG project is estimated to cost around US$1.5 billion.

Santos, with a 10.6 per cent interest, is the only Australian-owned company involved in this world-class project which is located about 250 kilometers off the southern coast of Timor-Leste and 500 kilometers offshore from Darwin in Australia. The field contains estimated recoverable hydrocarbons of 400 million barrels of petroleum (liquefied petroleum gas and condensate) and 3.4 trillion cubic feet of natural gas.

Interests in the total Bayu-Undan project are ConocoPhillips as operator with 56.72%; Eni with 12.04%; Santos with 10.64%; Inpex with 10.52%; Tokyo Electric Power/Tokyo Gas with 10.08%.

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