Santos Launches First Gas Shipment from Barossa Project After Delays

Santos has successfully launched the first gas shipment from its Barossa project after facing extensive delays. The $5.6 billion project, located offshore in the Timor Sea, marks a significant milestone for the company and the Northern Territory’s economy.

Details of the First Shipment

The inaugural shipment of liquefied natural gas (LNG) departed from Darwin, en route to the Sakai terminal in Japan. This announcement was made in Santos’ quarterly report, indicating progress after more than a year of setbacks.

Background on the Project

Originally scheduled to begin in the first half of 2025, the Barossa project encountered considerable delays. In 2023, pipeline construction was paused due to legal proceedings initiated by First Nations elders from the Tiwi Islands concerning sacred sites.

Significant Issues at Darwin LNG

• The Darwin LNG plant was previously highlighted in 2022 for having a leaking storage tank for two decades.
• The methane leak poses environmental risks and has been described as equivalent to adding 8,300 new cars to the road annually.

Economic Implications

Energy analyst Saul Kavonic stated that the announcement of the initial gas shipment will be a relief for investors. However, he noted that Santos must demonstrate its capacity to maintain production and optimize operations moving forward.

Future Projections

Santos provided updates on its production expectations for 2027; however, these forecasts were less optimistic than investor hopes due to prior delays. Additionally, the company announced its Alaskan project, Pikka, is set to produce oil in early 2026.

Revenue Trends

• Santos reported a sales revenue of $1.2 billion for Q4 2025, reflecting a nine percent increase from the previous quarter.
• The total sales revenue for the year surpassed $4.9 billion.

Environmental and Governance Concerns

Challenges remain regarding Santos’ governance following the recent departure of its CFO. Environmental activists have criticized the company for not addressing the leaking storage tank. Experts believe that the ongoing methane leak could increase operational costs and complicate emissions management under Australia’s safeguard mechanism.

As Santos continues with the Barossa project, stakeholders are keenly monitoring its progress and potential environmental implications.