Santos, Tamboran Eye Project to Supply Darwin LNG Extension

Tamboran Resources Corp. and Santos Ltd. have signed an agreement to explore the potential of supplying a planned second train at Darwin LNG in Australia’s Northern Territory using gas from their EP 161 acreage.

EP 161 in the east of the Beetaloo Basin holds about 300,000 acres of Mid Velkerri B Shale at depths below 8,850 feet, and the liquefaction facility at Wickham Point presents an expansion opportunity of up to six million tons per annum (MMtpa), Tamboran said in a regulatory filing Thursday.

Adelaide-based Santos owns a 75 percent stake in EP 161 and Tamboran, also an Australian company, holds 25 percent.

In Darwin LNG, which started production 2006, Santos owns a 43.4 percent operating stake while the rest is distributed to Japanese and South Korean companies and Italy’s Eni SpA.

The non-binding memorandum of understanding for technical studies between Tamboran and Santos “aims to explore commercialization options for the development of DLNG Train 2 utilizing natural gas supplied from the extensive prospective gas resources within the Beetaloo Basin”, said Tamboran managing director and chief executive Joel Riddle.

While exploring supply participation in Darwin LNG, Tamboran said it remains committed to a plan to build a 6.6-MMtpa LNG in Darwin. Targeted to start operation 2030, NTLNG is planned to tap Beetaloo gas.

 “With approximately two million net prospective acres across the Beetaloo Basin, Tamboran holds significant gas resources capable of supplying Northern Territory and Australia’s East Coast gas market for decades”, Riddle said.

“With multiple commercialization pathways via LNG markets at Darwin and Gladstone and the East Coast domestic gas market, Tamboran is well positioned to assess opportunities to accelerate value for our shareholders”.

In EP 161 two Tanumbirini wells were drilled and flow-tested 2022, showing Marcellus Basin-type decline curves, according to Tamboran.

“We believe the shale within the deepest Beetaloo East region is on par with some of the high-quality shale qualities we have successfully unlocked in the Shenandoah South area in the Beetaloo West”, Riddle added.

Barossa Project

Santos and its Darwin LNG partners recently secured new bank borrowings totaling $800 million for life extension works involving a separate field, Barossa. Timor-Leste’s Bayu-Undan field stopped supplying feed gas to Darwin LNG late 2023 due to depletion.

“With these facilities in place, Darwin LNG is well-funded to complete the life extension works scheduled for mid-2025 and it positions Darwin LNG to consider future expansion of this important infrastructure, including through the potential provision of third-party carbon capture services in Darwin”, chief executive Kevin Gallagher said in a statement October 10, 2024.

In 2021 Santos made a positive final investment decision (FID) on the Barossa gas field project, securing a new source for Darwin LNG. Barossa is planned to start production 2025 under a $600 million development project. Barossa is expected to extend Darwin LNG’s life for around 20 years.

“The Barossa development will comprise a floating production, storage and offloading vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline”, Santos said in a press release March 30, 2021, announcing the FID.

Santos owns a 50 percent operating stake in the Barossa gas development project. South Korea’s SK E&S Co. Ltd. holds 37.5 percent, while Japan’s JERA Co. Inc. has the remaining 12.5 percent.

To contact the author, email jov.onsat@rigzone.com