Italian oil company Eni and Australia-based Santos on Monday agreed to jointly seek cooperation opportunities in Australia and East Timor.
Under the non-binding memorandum of understanding, the companies will look at potential optimizations, synergies, and sharing of infrastructure between the Barossa Project and the Evans Shoal development, including the potential expansion of Darwin LNG and options to repurpose and extend the life of Bayu-Undan field.
The deal could also see the two companies jointly develop CO2 capture and storage or utilization (CCUS) facilities, serving not only assets owned by the two companies but open to any interested third-party project in the Darwin area, with the long term objective of facilitating the creation of a CO2 management hub in the Northern Territory.
Also, Eni and Santos are eyeing potential collaboration in new upstream development opportunities in relation to other offshore stranded resources located in northern Australia.
In northern Australia and Timor-Leste Eni and Santos (Operator) are already partners in the Bayu-Undan gas and condensate field and in the associated Darwin LNG plant and connecting gas pipeline. In northern Australia, Eni is the operator of the Evans Shoal and Blacktip gas fields; Santos is the operator of the Caldita Barossa and Tern gas fields and has a participating interest in the Petrel gas field.
"For Eni this collaboration with Santos is an important step in the pathway to decarbonizing upstream activity in Australia, leveraging both companies’ expertise with the aim of reducing CO2 emissions. This agreement demonstrates the importance of adopting a synergistic approach that promotes cooperation between different players in the sector. Eni has recently launched a new strategy, which will lead the company to be carbon neutral by 2050 in all its operations, processes and products. In the long term, gas – which will be increasingly decarbonized – will represent more than 90% of Eni’s production," Eni said.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the MOU built on the momentum for the development of northern Australia following Santos’ FID announcement of the Barossa gas and condensate project and life extension for Darwin LNG for the next 20 years.
“Eni are already a highly valued partner in the Bayu-Undan project and this MOU strengthens our collaboration and cooperation,” Mr Gallagher said. CCS opportunities at Bayu-Undan are extremely exciting for Santos and Eni and today we are saying, we would like to be open for business to take your CO2," he said.
"In 2019 the London Convention was amended to allow CO2 to be transported across jurisdictions to enable the establishment of storage hubs.
“A CCS project at Bayu-Undan could provide a new job-creating and revenue-generating industry for Timor-Leste with quality carbon credits increasing in both demand and value internationally.
“Capturing and storing CO2 from industries in the Northern Territory will help it meet its netzero emissions by 2050 target. That’s good for the environment, good for local jobs, good for local investment and good for regional development.”
Other areas of cooperation include the possible development of Petrel and Tern through Blacktip/Yelcherr gas plant facilities.
“As I said when I was in Darwin to announce our FID decision for Barossa, we have approval for two more trains at DLNG and we are open to third party gas opportunities,” Gallagher said.