Santos Barossa Gas Project Reaches 80% Completion
- 22-Aug-2024 2:49 PM
- Journalist: Sasha Fernandes
Santos has released its financial performance for the first half of 2024, showcasing robust revenue growth and strong profitability. During this, the company revealed that the Barossa Gas project has reached 80% completion.
The company reported total sales of US$2.711 billion, driven by increased production and higher commodity prices. EBITDAX reached US$1.846 billion, reflecting efficient operations and cost management. Underlying profit for the period amounted to US$654 million, demonstrating the company's ability to generate substantial earnings. Santos demonstrated robust financial performance, generating a substantial US$1.068 billion in free cash flow from operations. This underscores the company's strong financial position and its commitment to delivering value to shareholders through dividends, share buybacks, or investments in growth initiatives.
Kevin Gallagher, Managing Director and CEO of Santos, highlighted the company's strong cash returns, attributing them to a high-performance culture, disciplined low-cost operations, and a focus on safety and reliability. He emphasized that Santos' ability to generate robust cash flow from operations, advance major projects, and provide competitive shareholder returns is a testament to its disciplined operating model. Gallagher also noted that the company remains resilient across various scenarios and price cycles, with key projects like Moomba CCS nearing completion, Barossa on track for next year, and Pikka set to come online in the first half of 2026.
The Barossa Gas Project is advancing rapidly, now nearing 80% completion, with first gas production expected in the third quarter of 2025. A key component of the project, the Gas Export Pipeline, which will transport gas from the Barossa field to the Darwin LNG facility, has been successfully finished. The project has also achieved a significant milestone with the successful drilling and completion of the third Barossa well, which delivered reservoir results exceeding expectations. Additionally, the Floating Production, Storage, and Offtake (FPSO) vessel is on schedule, set to depart for Australia in the first quarter of 2025. These developments underscore the project's steady progress toward its operational goals.
Mr. Gallagher expresses optimism regarding the Barossa project's advancement, highlighting the promising findings from the third well's exploration. This promising development suggests that, once fully operational, Barossa will significantly enhance Santos' LNG portfolio by adding approximately 1.8 million tonnes per annum (Mtpa). In addition, Gallagher highlighted the advancement of the Pikka Project, which is nearing 60% completion, with first oil expected in the first half of 2026. The drilling program has successfully reached the eleventh well, with six wells showing encouraging results. Importantly, Pikka is designed to be a low-carbon-intensity project, achieving net-zero scope one and two emissions from the start.