Santos awarded BW Offshore a contract for the construction, connection, and operation of a floating production, storage, and offloading (FPSO) vessel for the multibillion-dollar Barossa gas and condensate development offshore Australia. The BW Offshore win displaces rival MODEC, which was awarded a contract to supply the vessel in October 2019 when ConocoPhillips controlled the project.
Santos purchased the US-based explorer’s interest in Barossa as part of a larger acquisition around the same time. A planned second quarter 2020 final investment decision (FID) on Barossa was delayed to due the impacts of COVID-19 and other economic concerns.
The lease and operate contract has a firm period of 15 years, with 10 years of options. The firm period contract value is $4.6 billion and is subject to FID by Santos and its partners, which is expected in the coming weeks, according to Santos.
The unit for the Barossa gas field will be a large FPSO with processing capacity for up to 800 MMscf/D of gas and design capacity of 11,000 B/D of stabilized condensate. The FPSO will be turret moored with a newbuilt hull based on BW Offshore’s Rapid Framework design.
The Rapid Framework concept is based on the contractor’s experience from the development of the Catcher FPSO in 2017, allowing for concurrent hull construction and topside integration by removing interdependencies during the construction phase. For Barossa, the topside weight is expected to be approximately 35,000 tons.
BW Offshore said the $2 billion FPSO Capex will be financed by banks and equity partners as well as $1 billion in total advance lease payments during the construction period.
The Barossa FPSO will be built in South Korea and Singapore before being towed and permanently moored at the field where it will produce and process natural gas for export via pipeline to Darwin LNG. Condensate will be stored on the FPSO for periodic offloading.
Santos previously finalized transport and processing agreements for Barossa gas to be tolled through Darwin LNG and signed a long-term LNG sales agreement with Diamond Gas International, a wholly owned subsidiary of Japan’s Mitsubishi.
First gas production from Barossa is targeted for the first half of 2025.
Santos currently holds a 62.5% operated interest in the Barossa joint venture along with partner SK E&S holding the remaining 37.5% stake.
Santos is finalizing an agreement to sell a 12.5% interest in Barossa to Darwin LNG partner JERA and has a binding agreement to sell 25% interests in Bayu-Undan and Darwin LNG to SK E&S, subject to FID on Barossa.
