Shares in Santos Ltd (ASX: STO) were trading higher on Tuesday morning after the company announced it had shipped the first cargo of liquefied natural gas from its Barossa project off the coast of the Northern Territory.
The oil and gas company said in a statement to the ASX that the first cargo had been loaded at the Darwin liquefied natural gas (LNG) plant onto the Kool Blizzard and was on its way to Japan.
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Big day for the company
Santos Managing Director Kevin Gallagher said it was a major milestone for the company, which had delivered the project within the original budget and within about six months of the planned start date.
This is an outstanding achievement for a project of this scale and complexity in the global offshore upstream sector. It demonstrates Santos' self-execution capability in delivering major development projects and the success of our disciplined, low-cost operating model. I am proud of the way the whole Santos team navigated through the impacts of the COVID-19 pandemic, regulatory approvals, legal challenges and supply chain disruptions during the construction phase.
Mr Gallagher said when the project was signed off for investment in March 2021, it was "the biggest investment Australia's oil and gas sector had seen for almost a decade''.
He added:
We took a final investment decision for Barossa LNG in March 2021 at a time when the economy was re-emerging from the COVID-19 lockdowns, and job-creating and business-generating projects like Barossa were critical for the Northern Territory and Australia. At the same time, Barossa LNG will continue to drive a stronger economy for the Northern Territory and Territorians. The 2025-26 Northern Territory budget papers forecast gross state product to rebound by 7.8 per cent for the year, largely driven by Barossa LNG exports, before growing a further 5.9 per cent in 2026-27 on the back of the LNG industry. "Barossa LNG will secure approximately 300 permanent positions in the Northern Territory for the next 20 years, with an estimated A$2.5 billion worth of wages and contracts expected to flow for Territorians over that time.
Mr Gallagher said the project would also contribute up to $10 million per year into the Barossa Aboriginal Future Fund, which would invest in projects to improve community infrastructure and services, and help establish pathways to employment.
Santos is the operator of Barossa and holds a 50% interest, with joint venture partners PRISM Energy International Australia (37.5%) and JERA Australia (12.5%).
Santos shares were 3% higher in early trade at $6.65. The company was valued at $20.98 billion at the close of trade on Friday.
