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Australia’s energy major Santos has said it expects lower natural gas production next year as its Bayu-Undan offshore gas field nears depletion.
While the level of gas production for 2024 is in line with analyst expectations, at between 89 and 93 million barrels of oil equivalent, it is lower than the expected output level for this year, Reuters noted in a report.
The Bayu-Undan field is located in the Timor Sea and was discovered in the 1990s. Commercial production began in 2004 with ConocoPhillips as the operator and Santos among the minority shareholders. The Australian company acquired the controlling stake in the field from Conoco in 2020. The productive life of the field was estimated at 25 years.
Santos is also the majority shareholder in the PNG LNG project in Papua New Guinea. It acquired the stake after its purchase of Oil Search in 2021. PNG LNG is considered one of the lowest-cost LNG projects globally.
Santos is also the developer of the Darwin LNG project, which will source gas from the offshore Barossa field. The company made the final investment decision on the Barossa project last year. First production of LNG is scheduled for 2025.
The Australian company, which is the country’s second-largest gas producer, is also expanding in other directions. This week, the company announced a partnership with Japan’s top gas utility, Tokyo Gas, to study the production of carbon-neutral methane for marketing in Japan.
“Santos is committed to delivering affordable, reliable, lower-carbon energy for our customers in Australia and Asia,” the company’s energy solutions executive VP, Alan Stuart-Grant said.
“E-methane has the potential to be an important carbon-neutral fuel – a direct substitute for natural gas – that avoids the cost associated with new infrastructure and new industrial processes, which for many sectors are not yet technically feasible, affordable or available.”
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com