Multi-billion dollar Australian gas mega-project getting back on track - Upstream Online

Multi-billion dollar Australian gas mega-project getting back on track | Upstream Online

Santos’ US$3.6 billion giant Barossa gas field development offshore Australia has received a fillip from offshore regulator, the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema), which on Friday (re)approved the project’s development drilling campaign.

The development drilling had been suspended midway through the second of a six-well campaign following a legal challenge, which had the potential to derail Barossa’s targeted start-up in the first half of 2025.

“The Barossa development drilling and completions Environment Plan (EP) was accepted by the regulator… on Friday 15 December,” Santos confirmed in a statement.

The move paves the way for Valaris’ semi-submersible rig Valaris MS-1 to resume development drilling operations at Barossa — the rig had been on costly standby offshore Darwin for more than a year after a court ruling last year brought work to an immediate halt.

While there is a 30-day window to appeal Nopsema's decision, it is likely the offshore regulator heavily scrutinised the proposal to reduce the risk of a legal challenge, Citi analysts said in a note, reported Reuters.

Following the Federal Court in September 2022 setting aside the offshore regulator’s March 2022 original approval of the EP, Santos said it had conducted further extensive consultation with Tiwi Island people and other relevant persons consistent with the applicable regulations, the offshore regulator’s guidelines and guidance provided by the decision of the Full Federal Court.

The crux of the court case was that Santos had failed to consult with the Tiwi Islanders — the Barossa gas pipeline will pass near to their islands. Tiwi Senior Lawman Dennis Tipakalippa had argued that Nopsema should not have approved Santos’ plans for the Barossa development drilling campaign because the company had not properly consulted the Munupi clan.

Nopsema noted that as part of Barossa’s offshore project proposal (OPP), which it had approved back in 2018, Santos’ plans involve development drilling and well completions within Commonwealth petroleum production licence NT/L1 with the entire campaign expected to take approximately two years.

The operational area, which encompasses the entire licence, is located some 33 kilometres from the Oceanic Shoals Australian Marine Park. Water depths at the block range from around 204 to 376 metres.

Six subsea production wells are planned to be drilled and completed around the future locations of three subsea production manifolds, with two wellheads adjacent to each manifold. If required, up to two contingency production wells could be drilled and completed at any manifold, for a total of up to eight wells at Barossa.

“This EP provides for drilling and completing the wells using a semi-submersible mobile offshore drilling unit and light well intervention vessel, and the ongoing management of the complete wells until future commissioning and production phases,” said Nopsema.

Activities approved under the Barossa Development Drilling and Completions EP include rig and vessel commissioning and demobilising; the deployment and recovery of the rig’s anchors and mooring lines; installation of Christmas trees and contingency operations such as side-tracking, redrilling sections, re-spudding of wells and abandonment.

The EP remains valid for five years from the date that it was accepted by Nopsema.

Santos on Monday added it is proceeding with applications for all remaining approvals for the Barossa gas project, which is intended to provide backfill feed gas to the Darwin LNG liquefied natural gas project in Australia’s Northern Territory.

The operator is currently awaiting a court ruling following an injunction that last month effectively halted pipelaying operations on part of Barossa's offshore pipeline infrastructure.

The Barossa co-venturers are SK E&S and Jera.

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