[Australia] Barossa

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escveritas
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[Australia] Barossa

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MODEC Awarded FEED Contract of an FPSO for Barossa Offshore Project
Tokyo, July 3, 2018

MODEC, Inc. ("MODEC") is pleased to announce that its subsidiary, MODEC International Inc., has been awarded a contract by ConocoPhillips Australia, as operator of the Barossa joint venture, for the Front End Engineering Design (FEED) of a Floating Production Storage and Offloading (FPSO) vessel for Australian waters.

Under the contract, MODEC shall participate in the FEED on a competitive basis against a JV of two other contractors. Barossa is an offshore gas and light condensate project that proposes to provide a new source of gas to the existing Darwin LNG facility. The offshore development concept includes subsea production system and gas export pipeline as well as the FPSO, located approximately 300 kilometers north of Darwin, Australia.

MODEC has an excellent track record of Engineering, Procurement and Construction (EPC) projects of delivering five (5) FPSOs in Australia, five (5) of which MODEC operated for a total of 42 years.

The Barossa joint venturers are ConocoPhillips Australia Barossa Pty Ltd (operator, 37.5%), SK E&S Australia Pty Ltd (37.5%) and Santos Offshore Pty Ltd (25.0%).

MODEC Awarded Contract to Supply FPSO for Barossa Field offshore Australia by ConocoPhillips
Tokyo, October 30, 2019

MODEC, Inc. ("MODEC") is pleased to announce that it has signed a contract with ConocoPhillips Australia Barossa Pty Ltd to supply a Floating Production Storage and Offloading (FPSO) vessel for the Barossa field, offshore Australia. The Barossa FPSO is intended to produce gas and condensate from subsea wells and after treatment, supply feed gas to the Darwin LNG Plant via a gas export pipeline.

MODEC was awarded a Front End Engineering Design (FEED) contract of the Barossa FPSO in June 2018 and has now been selected as the turnkey contractor based upon its successful performance and deliverables of the FEED contract.

The Barossa FPSO is MODEC's largest size of "Gas FPSO" to date, which will be able to export over 600 million standard cubic feet of gas per day as well as store up to 650,000 barrels of condensate for export. It has been designed to withstand a 100-year cyclone event at a water depth of 260 meters and located some 300 kilometers off north of Darwin, Australia.

MODEC will be responsible for the Engineering, Procurement, Construction and Installation (EPCI) of the Barossa FPSO, including topsides processing equipment as well as hull and marine systems. Scheduled for delivery during 2023, the FPSO will be permanently moored by an internal turret mooring system supplied by a MODEC group company, SOFEC, Inc.

The Barossa FPSO will be the first application of MODEC's "M350 Hull", a next generation new built hull for FPSOs, full double hull design which has been developed to accommodate larger topsides and larger storage capacity than conventional VLCC tankers, with a longer design service life of 25 years and beyond. The hull will be built by Dalian Shipbuilding Industry Co., Ltd. (DSIC) in Dalian, China.

The FPSO features a boiler and steam turbine based power generation system instead of conventional gas turbines, which helps reduce the carbon dioxide footprint of the facility.

"We are extremely honored and proud to have been selected to provide the Gas FPSO for Barossa project," commented Yuji Kozai, President and CEO of MODEC. "This contract award of a Gas FPSO reinforces one of our important business strategies, which we aim to penetrate into gas-related market. Also this new contract represents a significant milestone for MODEC in applying our next generation new built FPSO hull design of which we have developed to meet the new market demands for larger FPSOs. We are equally pleased to be a part of the team that will provide natural gas, a major clean energy source, for the benefit of the people and environment."

The Barossa FPSO will be MODEC's 6th FPSO in Australia and this contract award confirms its advanced position as the leading FPSO service provider in the country.

The Barossa joint venture is currently formed by ConocoPhillips Australia Barossa Pty Ltd (field operator, 37.5%), SK E&S Australia Pty Ltd (37.5%) and Santos Offshore Pty Ltd (25.0%).
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Re: [Australia] Barossa

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The Barossa Project is an offshore gas and condensate project that proposes to provide a new source of natural gas to the existing Darwin LNG (DLNG) facility in the Northern Territory. The project is being progressed by joint venturers ConocoPhillips Australia Barossa Pty Ltd (Operator), SK E&S Australia Pty Ltd and Santos Offshore Pty Ltd.

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The offshore development concept includes a Floating Production Storage and Offloading (FPSO) facility, subsea production system, supporting subsea infrastructure and gas export pipeline, all located in Commonwealth waters about 300 kilometres northnorthwest of Darwin.

The DLNG infrastructure owners are currently assessing options to backfill the facility’s existing LNG train from 2023 when the current gas supply from the Bayu-Undan offshore field is expected to be exhausted.

If Barossa is selected as the DLNG backfill option, it would enable continued operation of the DLNG facility for a further 20 plus years. In addition to meeting future global demand for natural gas, the Barossa Project would contribute significant income, employment and other benefits to the Northern Territory and Australia.

In April 2018, Barossa entered the Front-End Engineering Design (FEED) phase of development which will continue until approximately the end of 2019. During the FEED phase, the costs and technical definition for the project will be matured, LNG and condensate sales agreements progressed, and access arrangements negotiated with the owners of the DLNG facility and BayuUndan pipeline to Darwin.

The major FEED contracts for the FPSO, subsea infrastructure and gas export pipeline have been awarded. A Final Investment Decision (FID) on the project would be made following the FEED phase.

The Barossa Project area encompasses petroleum retention lease NT/RL5 (the Barossa Field), where initial development would occur, and potential future phased development in the smaller Caldita Field to the south in retention lease NT/RL6.

The development concept notionally involves drilling 10 subsea wells in two phases. The subsea production gathering system lies on the ocean floor at a water depth of approximately 250 metres.

Gas and condensate would be gathered from the wells by the subsea production system and then brought to the FPSO via a network of subsea flowlines and risers.

Initial processing to separate the gas, water and condensate extracted from the field would then occur on the FPSO.

Condensate would be transferred from the FPSO to specialised tankers for export. Gas would be exported to DLNG via a new 260 km export pipeline tied into the existing Bayu-Undan to Darwin pipeline about 100 km from Darwin, subject to access arrangements being negotiated with existing infrastructure owners.

The exact route of the new pipeline from the Barossa Field is not final and is subject to further studies, but would be located in the gas export pipeline corridor as outlined in the map above.

Barossa to date

Exploration
• Lynedoch-1 and Lynedoch-2 drilled by Shell in 1973 and 1996
• ConocoPhillips acquired acreage with Santos and drilled Caldita-1, Barossa-1 and Caldita-2 during 2005 to 2007

Appraisal
• 3D seismic undertaken by ConocoPhillips during 2007/2008
• SK E&S farmed-in to the acreage in 2012 and drilled in 2014/15
• ConocoPhillips drilled Barossa-2, Barossa-3 and Barossa-4 during 2014/2015
• New 3D seismic acquisition in 2016
• Barossa-5A and Barossa-6 were drilled in 2017

Pre-FEED
• Completed March 2018

FEED
• Commenced April 2018
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Re: [Australia] Barossa

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SANTOS ANNOUNCES FID ON THE BAROSSA GAS PROJECT FOR DARWIN LNG
30TH MAR 2021

Santos, as operator of the Barossa joint venture, today announced a final investment decision (FID) has been taken to proceed with the US$3.6 billion gas and condensate project, located offshore the Northern Territory.

Barossa FID also kick-starts the US$600 million investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for around 20 years. The Santos-operated Darwin LNG plant has the capacity to produce approximately 3.7 million tonnes of LNG per annum.

Barossa is one of the lowest cost, new LNG supply projects in the world and will give Santos and Darwin LNG a competitive advantage in a tightening global LNG market. The project represents the biggest investment in Australia’s oil and gas sector since 2012.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said FID on Barossa was consistent with Santos’ strategy for disciplined growth utilising existing infrastructure around the company’s core assets.

“Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter this next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model,” Mr Gallagher said.

“As the economy re-emerges from the COVID-19 lockdowns, these job-creating and sustaining projects are critical for Australia, also unlocking new business opportunities and export income for the nation. The Barossa and Darwin life extension projects are good for the economy and good for local jobs and business opportunities in the Northern Territory.

“Barossa and Darwin LNG life extension will create 600 jobs throughout the construction phase and secure 350 jobs for the next 20 years of production at the Darwin LNG facility.

“Less than a year since we completed the acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets and despite the global economic impact of a once-in-a-hundred-year pandemic, it is a great achievement to have extended the life of Bayu-Undan following the approval of the infill drilling program and now to have taken FID on the Barossa project. I’d like to thank the Australian, Northern Territory and Timor-Leste governments, our joint venture partners and our customers for their support.

“I am delighted to welcome our Barossa joint venture partner SK E&S as a partner in Bayu-Undan and Darwin LNG and appreciate their support for today’s Barossa development decision.”

The Barossa development will comprise a Floating Production, Storage and Offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline. First gas production is targeted for the first half of 2025.

At the end of last year, Santos announced the tolling arrangements had been finalised for Barossa gas to be processed through Darwin LNG and that Santos had signed a long-term LNG sales agreement with Diamond Gas International, a wholly-owned subsidiary of Mitsubishi Corporation, for 1.5 million tonnes of Santos-equity LNG for 10 years with extension options.

Santos has also signed Memoranda of Understanding with SK E&S and Mitsubishi to jointly investigate opportunities for carbon-neutral LNG from Barossa, including collaboration relating to Santos’ Moomba CCS project, bilateral agreements for carbon credits and potential future development of zero-emissions hydrogen.

“We will continue to explore the potential for carbon-neutral LNG from Barossa as part of our commitment to lower global emissions and as a company, reach our net-zero emissions target by 2040,” Mr Gallagher said.

Barossa FID is the final condition required for completion of the 25 per cent equity sell-downs in Darwin LNG and Bayu-Undan to SK E&S, which is also a partner in Barossa. Completion of the SK transaction is expected to occur at the end of April and result in net funds to Santos of approximately US$200 million, being the sale price of US$390 million less the forecast cashflows from the 25 per cent interests from the effective date of 1 October 2019 to completion.

Santos and JERA continue to progress the binding sale and purchase agreement for JERA to acquire a 12.5 per cent interest in Barossa.

Completion of the sell-downs to SK E&S and JERA will see Santos’ interests in Bayu-Undan and Darwin LNG change to 43.4 per cent, and in the Barossa project to 50 per cent.

The Barossa investment decision will see approximately 380 million barrels of oil equivalent resources commercialised to 2P reserves at Santos’ expected 50 per cent interest in the project following the sell-down to JERA.
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Re: [Australia] Barossa

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SANTOS AWARDS BAROSSA FPSO CONTRACT
24TH MAR 2021

Santos, as operator of the Barossa joint venture, today announced award of the project’s major contract for the construction, connection and operation of the Floating Production, Storage and Offloading vessel (FPSO).

The FPSO services contract awarded to international vessel builder and operator BW Offshore (BWO) is subject to a final investment decision (FID) on Barossa and represents the largest capital expenditure component of the approximately US$3.6 billion Barossa offshore gas and condensate project to backfill Darwin LNG. The contract contains an upfront pre-payment and an option to buyout, and achieves an overall reduction of approximately US$1 billion in capital expenditure.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said through extensive and intensive contract review processes, the company had achieved a significant financial saving as well as significant energy efficiency improvements.

“The decision to proceed with an FPSO services contract maintains a low ongoing operating cost while engineering enhancements have significantly reduced the project’s carbon footprint,” Mr Gallagher said.

“This reduction in capital expenditure makes Barossa one of the lowest cost of supply projects in the world for LNG and will provide new supply into a tightening LNG market.”

The FPSO will be built in South Korea and Singapore before being towed and permanently located in the field where it will process natural gas prior to its transport via pipeline to Darwin LNG. Condensate will be stored on the FPSO for periodic offloading.

Barossa will provide the next source of gas for the existing Santos-operated Darwin LNG plant once current reserves from the Santos-operated Bayu-Undan field in the Timor Sea have been depleted.

Mr Gallagher said the awarding of this contract builds on the momentum of the Barossa project over the past six months and is the final milestone ahead of FID.

“At the end of last year, we announced that transport and processing agreements had been finalised for Barossa gas to be tolled through Darwin LNG and we signed a long-term LNG sales agreement with Diamond Gas International, a wholly-owned subsidiary of Japan’s Mitsubishi Corporation.”

A final investment decision on the Barossa project is anticipated in the coming weeks with first gas targeted for the first half of 2025.

Santos currently holds a 62.5 per cent operated interest in the Barossa joint venture along with partner SK E&S (37.5 per cent).

Santos is finalising an agreement to sell a 12.5 per cent interest in Barossa to Darwin LNG partner JERA and has a binding agreement to sell 25 per cent interests in Bayu-Undan and Darwin LNG to SK E&S, subject to FID on Barossa.
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