Santos (ASX: STO) and Eni (NYSE: E) reported Monday that they have signed a memorandum of understanding (MOU) to cooperate on opportunities in northern Australia and Timor-Leste.
The non-binding MOU reflects both companies’ intent to collaborate – along with other parties in the region – to use existing infrastructure more efficiently, develop regional gas resources, and create new low-carbon business opportunities for northern Australia and Timor-Leste, Santos noted in a written statement emailed to Rigzone.
The companies already partner in the Santos-operated Bayu-Undan gas and condensate field and in the associated Darwin LNG plant and connecting gas pipeline, Eni stated separately. In addition, Eni pointed out that it operates the Evans Shoal and Blacktip gas fields and Santos operates the Caldita Barossa and Tern gas fields. Moreover, it observed that Santos holds a participating interest in the Petrel gas field.
“Eni are already a highly valued partner in the Bayu-Undan project, and this MOU strengthens our collaboration and cooperation,” remarked Kevin Gallagher, Santos’ managing director and CEO.
Gallagher added the MOU builds upon momentum for northern Australia development following Santos’ final investment decision for the Barossa gas and condensate project and 20-year Darwin LNG life extension.
According to Eni, the companies will seek cooperation opportunities under the MOU in the following areas:
Santos stated that possibly developing the Petrel and Tern fields through the Blacktip/Yelcherr gas plant facilities represents another cooperation opportunity. Gallagher pointed out that a carbon capture and storage (CCS) project at Bayu-Undan could provide Timor-Leste with a new industry that creates jobs and generates revenue.
“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,” commented Gallagher, adding that a 2019 amendment to the London Convention allows CO2 to be transported across jurisdictions so that storage hubs can be established. “Capturing and storing CO2 from industries in the Northern Territory will help it meet its net-zero emissions by 2050 target. That’s good for the environment, good for local jobs, good for local investment, and good for regional development.”