Santos delivers Scotia

Santos Managing Director and CEO Kevin Gallagher.

Santos Managing Director and CEO Kevin Gallagher.

Santos has successfully completed commissioning and start-up of the Scotia CF1 project in Queensland, ahead of schedule and under budget.

Initial full field production exceeds 40 TJ/day, in line with expectations.

The project, situated in the Bowen Basin, 340 km northwest of Brisbane, will supply about 70 TJ/d at peak production in late 2019, significantly boosting gas supply to the Santos GLNG project and benefiting both the east coast domestic gas and export LNG markets.

More than 400 people worked on the project, which involved expanding the Scotia compression plant and field from 23 to more than 100 wells, building 85 km of linear infrastructure, two 4G communications towers and an irrigation system for water treatment.

“The project was estimated to cost $493 million, but the team has delivered it for $416 million, sixteen per cent under budget,” said Santos Managing Director and CEO Kevin Gallagher.

“Site infrastructure is also running three months ahead of schedule and some of the well completions are a year ahead of time.

“This is a testament to the Santos team and reflects our laser focus on cost of supply, innovation and efficiency over the last two and a half years.

“The project is entirely on private land and I thank our landholders for their cooperation and support which has made this achievement possible.”

Denison sale

Santos also announced the sale of its non-core Denison Trough assets in Queensland to Orient (Denison Trough) Pty Ltd, owned by a consortium of Shandong Order Gas Company and Orient Energy, for up to $43 million.

The assets sold comprise Santos’ 50 per cent non-operated interests in the Denison conventional assets as well as ATP 1177.

Santos has received $22 million in cash at completion and is entitled to further contingent payments of up to $21 million if certain milestones are achieved by the purchaser.

Santos expects to record a profit on sale at completion of approximately $70 million.

The sale of the Denison assets is consistent with Santos’ ongoing strategy to realise value from its non-core assets.

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