Darwin LNG Terminal

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Darwin LNG Terminal is an LNG terminal in Northern Territory, Australia.

An expansion project has been proposed but is presumed shelved as of May 2024 due to no activity for the past 3 years.

Location

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Project Details

Train 1

• Operator: Santos
• Owner: Santos (43.4%), SK E&S (25%), INPEX (11.4%), Eni SpA (11%), JERA (6.1%), Tokyo Gas (3.1%)
• Parent company: Santos (43.4%), SK C&C (25%), INPEX (11.4%), Eni (11%), Tokyo Electric Power Company (3.05%), Chubu Electric Power (3.05%), Tokyo Gas (3.1%)
• Location: Darwin, Wickham Point, Northern Territory, Australia
• Coordinates: -12.5221, 130.8663 (exact)
• Capacity: 3.7 mtpa, 0.46 bcfd
• Cost: 1.6 billion USD
• Status: Idle
• Type: Export
• Start year: 2006
  • expected to restart in Q1 2025
• Associated infrastructure: Barossa Oil and Gas Field (Northern Territory, Australia)
  • formerly: Bayu Undan Oil and Gas Field (Timor-Leste); Bayu Undan Oil and Gas Field (East Timor)

Train 2

• Operator: Santos
• Owner: Santos (43.4%), SK E&S (25%), INPEX (11.4%), Eni SpA (11%), JERA (6.1%), Tokyo Gas (3.1%)
• Parent company: Santos (43.4%), SK C&C (25%), INPEX (11.4%), Eni (11%), Tokyo Electric Power Company (3.05%), Chubu Electric Power (3.05%), Tokyo Gas (3.1%)
• Location: Darwin, Wickham Point, Northern Territory, Australia
• Coordinates: -12.5221, 130.8663 (exact)
• Capacity: 3.7 mtpa
• Status: Shelved
• Type: Export
• Start year:

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Train 1

The Darwin LNG Terminal is an onshore LNG terminal in Northern Territory, Australia. It has one liquefaction and purification train, a 311 mile (500 kilometre) offshore facility, and a subsea pipeline from Bayu-Undan field in the East Timor Sea to Darwin in Australia's Northern Territory.

The final investment decision was made in 2003. Construction began in June 2003. The plant was officially commissioned in January 2006. According to the company website, since 2006, an average of one cargo per week has been shipped to its Tokyo Electric and Tokyo Gas customers. As of 2017, Australia is the second largest LNG exporter after Qatar. The country exports almost 44 million tons a year.

In March 2020 Santos announced that would sell its 25% stake in the Darwin LNG facility and in the Bayu-Undan gas field off Northern Australia to SK E&S of South Korea for $390 million.

In 2021, Santos announced that the Bayu-Undan gas field offshore Timor-Leste would provide a new supply source for and extend the life of the Darwin LNG plant.

According to IGU's 2023 World LNG Report, in 2022 Darwin LNG experienced feedgas supply issues from the Bayu-Undan gas field. They add, "Gas production from the Bayu-Undan gas field is estimated to cease at end-2023 with the operator considering backfilling options to support future LNG production once Bayu-Undan has been fully depleted. Santos had decided to proceed with the $311 million Darwin pipeline duplication project to enable gas from its offshore Barossa field to flow to DLNG with the first gas expected in 1H 2025."

In November 2023, the last LNG cargo produced from the Bayu-Undan gas field was shipped out.

Train 1 life extension project

In March 2024, UGL was awarded a contract for Darwin LNG "life extension project" which would prepare the facility to operate for the next 20 years, and would include deployment of a floating production storage and offloading (FPSO) vessel upstream at the Barossa oil and gas field. Work on the extension project was expected to start immediately in March 2024.

The terminal will source its gas from the Barossa Oil and Gas Field (Northern Territory, Australia). As of April 2024, production was expected to restart in the first quarter of 2025.

Train 2 expansion project

Darwin LNG is trying to find new sources of gas. Multiple options are being considered.

According to the International Gas Union's 2017 report, because of declining natural gas feedstock, Darwin considered backfilling existing liquefaction and purification trains instead of building more expansion trains. Darwin has not halted plans for train expansion. In April 2017, the company announced it would conduct a feasibility study to asses whether a second train should be added to the facility. The Northern Territory government will contribute 40% of the feasibility study cost. ConocoPhillips and upstream resource owners, Evans Shoal, Caldita-Barossa, Poseidon, Cash Maple and Bonaparte LNG Terminal's offshore facility, will fund the remaining 60%.

Woodside and ConocoPhillips, operators of Australia’s two oldest LNG plants, Darwin LNG Terminal and North West Shelf LNG Terminal, are considering cheaper development options for their Browse and Barossa gas fields to compete against Qatar. Qatar added to the fears of Australia’s LNG owners in July 2017 when it announced a 23 million ton-a-year increase in gas exports.

ConocoPhillips owns 37.5 percent of the Barossa gas field. The company prefers Barossa gas to feed the Darwin LNG Terminal.

In April 2017 Australia’s Northern Territory government set aside A$250,000 for a feasibility study into the potential expansion of the Darwin LNG plant. In February 2018 it was reported that Santos was considering exporting Bonaparte Basin gas through the Darwin terminal. In November 2018 it was reported that ConocoPhillips was still considering the expansion. In mid-March 2020, Macquarie Wealth Management warned that a prolonged collapse in oil prices could result in delays to capital expenditure infrastructure projects, including Santos's AUS$7 billion Barossa gas project. Confirmation that the Barossa project has been officially delayed came on March 23 when Santos chief executive Kevin Gallagher announced that all of the company's expansion projects were being put on hold, with no indication given as to when Barossa would be advancing.

In May 2021 Upstream Online reported that ConocoPhillips and its partners were still considering expanding Darwin LNG with a second train and that a feasibility study was set to be completed that year.

There have not been any new developments related to this field since August 2021, and so this project is presumed to be shelved.