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Darwin LNG will cease production as Bayu-Undan depleted, Barossa suspended
Australian Darwin LNG will cease production as Bayu-Undan gas field depleted and Barossa project suspended.
Darwin LNG plant’s LNG production in 2023-H1 was 0.3 MMT lower than 2022-H1 as its sole feedgas provider Bayu-Undan field in Timor Sea approaches end of life, the plant’s operator Santos said, adding that production from the field is expected to cease in the second half of this year.
The 3.7 MMT/Y Darwin LNG plant which started operations in 2006, shipped 4 cargoes in the first half of this year versus 12 cargoes in the first half of last year.


Following a final investment decision in 2021, Santos was developing the Barossa gas and condensate project to backfill Darwin LNG. The project was 60% complete as of July 2023, including Darwin Pipeline Duplication (66% excluding Darwin Pipeline Duplication).
However, the Barossa drilling operations are currently suspended pending re-assessment and acceptance of the environmental plan by the regulator, according to the Global LNG Database®.


In Sept. 2022, Australia's Federal Court ruled in favour of an indigenous group's challenge against a drilling permit for Barossa gas, in what Santos called a "disappointing" setback for the $3.6 billion project. Traditional landowners from the Tiwi Islands had asked the court in June to overturn drilling approval for the project.
Santos has defied the court decision given the “significance of the decision” to the company, its international joint venture partners and customers. “Project approval uncertainty is a public policy issue that should be urgently addressed by Australian governments to reduce risk for trade and investment in projects around the country.”
The Australian operator is optimistic that if “drilling re-commences before end 2023 and the export pipeline commences installation in 2023, the Barossa project remains on target to commence production in first half 2025 and within current cost guidance.”


Meanwhile, Mostafa Sharif, Gas Market Senior Advisor has reminded that production stoppage of the Bayu-Undan gas field which contributes about 85% of Timor-Leste’s budget while its Sunrise gas development project has also been stalled for years, will cause a big challenge for the poor country’s government that was struggling to find new financial sources to run the country.


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Source(s) Global LNG Database®, Santos