Santos, the operator of the proposed Barossa offshore gas and condensate project, has reached a final investment decision (FID) to proceed with the Darwin pipeline duplication project.

Barossa is being developed to provide an alternative source of natural gas to the existing Darwin LNG (DLNG) facility in the Timor Sea offshore Northern Territory.

With the FID achieved, the Barossa gas export pipeline can be now extended to the Santos-operated Darwin LNG (DLNG) facility.

In addition, the decision allows for the repurposing of the existing Bayu-Undan to Darwin pipeline to facilitate carbon capture and storage (CCS) options.

The gas from Barossa field, located 300kms north of Darwin, is anticipated to replace the current supply from the Bayu-Undan facility located in Timor-Leste.

The first gas production at DLNG using Barossa gas is expected in the first half of 2025.

Santos managing director and chief executive officer Kevin Gallagher said: “The DLNG Life Extension, Darwin Pipeline Duplication and Bayu-Undan CCS projects would promote sustainable development and jobs growth in the Northern Territory and Timor-Leste, while building momentum for a whole of region carbon reduction solution.

“Taking FID on the Darwin Pipeline Duplication Project will allow for the Barossa project to be CCS ready.

“The Bayu-Undan CCS project has the potential to capture and store up to 10 million tonnes of carbon dioxide per annum, equivalent to about 1.5 per cent of Australia’s carbon emissions each year from other projects, customers and other hard to abate industries and has the potential to be the largest CCS project in the world.”

The Barossa project is being developed under joint venture between ConocoPhillips Australia Barossa, SK E&S Australia and Santos Offshore.

With the extension of Darwin pipeline duplication project, Santos is estimated to increase its share of capital expenditure for the Barossa project by around $311m.

The Barossa JV and DLNG JV partners agreed to terminate an existing arrangement for the use of original Bayu-Undan to DLNG pipeline, to reduce the operating expenses.

The works at Darwin pipeline duplication project are expected to start in 2023, subject to regulatory approvals from Commonwealth and Northern Territory (NT).

Santos said that it will continue to work with Australian and Timor-Leste governments to establish regulatory frameworks to support future CCS operations.